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  1. Stock Market’s Expectations from Interim Budget

Stock Market’s Expectations from Interim Budget

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Upstox

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2 min read • Updated: February 2, 2024, 2:30 PM

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Summary

The primary expectation across individuals and companies is a reduction in tax rates. Lower tax rates mean more disposable income for individuals, fostering savings, consumption, or investment. Corporates benefit from lower tax rates by having more funds for expansion, dividends, and investments.

💰 Investors' Expectation #1: Lower Tax Rates:

The primary expectation across individuals and companies is a reduction in tax rates. Lower tax rates mean more disposable income for individuals, fostering savings, consumption, or investment. Corporates benefit from lower tax rates by having more funds for expansion, dividends, and investments.

📊 Investors' Expectation #2: Rejig Debt Instruments:

Debt segment investors are specifically looking for market-linked debentures (MLDs) holding period parity and clarity on the long-term investment status of debt-oriented mutual funds. Clarity on long-term capital gains (LTCG) tax is also sought after.

🏡 Investors' Expectation #3: Hike Home Loan Tax Exemption:

Given the realty sector's resurgence, investors are hoping for an increase in the tax exemption limit on housing loan interest to 2 lakhs. This move is expected to boost demand for various housing units, benefiting real estate stocks.

📉 Investors' Expectation #4: Removal of STT:

Investors and traders have been advocating for the removal or reduction of the Securities Transaction Tax (STT) for years, especially in the cash market segment. Let's see if this long-standing issue gets addressed in the upcoming budget.

💸 Investors' Expectation #5: Relief from Double-Taxation of Dividends:

Investors hope for relief from the double-taxation of dividends. Simplifying the taxation process for dividends received by shareholders after corporate tax payment would be a welcome move.

📑 Investors' Expectation #6: Streamlining Classification:

The current classification of taxes on equity and debt transactions is complex. Simplifying these rules in terms of transaction nature, holding period, listing status, indexation benefits, and residency status would make life easier for investors.