|
Investment Information and Credit Rating Agency (ICRA) Analytics has outlined several probable changes across key sectors, as the nation gears up for the Interim Union Budget for the fiscal year 2024-25,
The analysis provides insights into the anticipated alterations in taxation, pension, insurance, markets, and mutual funds. The demand for eliminating the Security Transaction Tax (STT) is gaining momentum, and its removal is expected to attract more investors to the domestic equity markets. A possible relief from double taxation on dividends, where companies and shareholders both pay taxes on dividends, is anticipated, aiming to boost market sentiments. ICRA Analytics foresees an increase in the minimum pension amount under the Atal Pension Yojana (APY) to attract more subscribers from the unorganized sector. Senior citizens may witness a positive change with the government possibly granting tax-free status to annuity income from the National Pension System (NPS). There might also be an increase in the annual investment limit for NPS. The markets are eager for a more comprehensive policy on cryptocurrency regulation, expecting increased participation with a well-defined regulatory framework. A comeback of sovereign green bonds in the Budget is anticipated, addressing funding requirements for the renewable energy sector. ICRA Analytics expects a substantial capital outlay for energy transition and net-zero objectives, with a focus on new-age fuels such as green hydrogen, ethanol, and biofuels. The government may address the tax treatment disparity between equity mutual funds and Unit Linked Insurance Plans (ULIPs). Equity Fund of Fund may also be brought at par with equity-oriented mutual funds for taxation. The analysis suggests a potential simplification of the capital gains taxation structure by introducing a uniform holding period across domestic equities and mutual funds to encourage higher compliance. There might be a revisit of the tax amendment to the Finance Bill from the previous year, especially concerning non-equity funds, considering the diverse risks involved in different investment instruments. As the government prepares to present the Interim Budget, these anticipated changes provide valuable insights into the potential financial landscape for the upcoming fiscal year. (ANI)
|
