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The government has made a proposal to impose tax on long term capital gains of more than Rs 100,000 at 10 percent without allowing benefit of any indexation, according to statement released by finance ministry.
All gains up to January 31 will be grandfathered, Finance Minister Arun Jaitley says during presentation of federal budget for FY19. Jaitley also proposed to introduce a tax on distributed income by equity oriented mutual fund at the rate of 10 percent to provide level playing field across growth-oriented funds and dividend distributing funds.
The change in capital gain tax will bring marginal revenue gain of about Rs 20,000 crore in the first year and revenues in subsequent years may be more, Jaitley said. The government estimates total amount of exempted capital gains from listed shares and units at about Rs 3.67 lakh crore as per returns filed for tax assessment year 2017-18.
Airline stocks rose as the government proposed an expansion of airport capacity. Shares of healthcare and insurance companies surged after a proposal to provide national healthcare insurance covering 10 crore people.
Key takeaways from #Budget2018 by @FTIIndia’s S Naganath. @darshanvmehta1 https://t.co/gKR9vSBO4F pic.twitter.com/JyeoadDaOW
— BloombergQuint (@BloombergQuint) February 1, 2018
Other cigarette makers
Prime Minster Narendra Modi said the budget not only improves ease of doing business, but also ease of living.
He said his government has worked to boost income of farmers, lift savings for middle-incomed Indians and also aid wealth of small companies. The measures will bring new forms of employment in rural regions, Modi said. “This budget will help accelerate India’s growth and strengthen the vision of the new India in the days to come,” he said.
Moody’s Investors Service on #Budget2018. https://t.co/4WEc2F8Jfc pic.twitter.com/yctCpfszqf
— BloombergQuint (@BloombergQuint) February 1, 2018
India proposes to spend Rs 63,836 crore in agriculture sector in FY19, Rs 85,010 crore in education, according to a budget document tabled in the parliament by Finance Minister Arun Jaitley.
Market has factored in the LTCG tax, says Envision Capital's Nilesh Shah.#Budget2018https://t.co/4WEc2ER8nE pic.twitter.com/ukpytVAfJU
— BloombergQuint (@BloombergQuint) February 1, 2018
Buyers and sellers were not immediately known
Source: Bloomberg
Other Tax Proposals:
In what could be a big setback for the markets, the government is said to propose long-term capital gains tax on equities, according to a Bloomberg report quoting sources.
Also Read: Jaitley Gives Infrastructure A Push
Some Other Notable Announcements:
The finance minister has pegged FY19 railway capex at Rs 1.48 lakh crore. The government has kept an aim to electrify 4,000 Kms of railway lines in FY19.
Good news for Mumbaikars. The government will spend around Rs 40,000 crore on upgrading the city’s train systems.
Key Railway Budget highlights
The government is seeking to construct a tunnel in the Sella pass. It will also look to complete 9,000 km of national highways in FY18. Moreover, the NHAI will organise road assets into an special purpose vehicle, Jaitley said.
Indian equity benchmarks held on to gains led by capital goods and FMCG shares as government focuses on rural and infra push in Budget.
The S&P BSE Sensex is up 0.35 percent or 127 points to 36,092 and the NSE Nifty 50 Index has gained 0.34 percent to 11,068.
Government sources: Likely to estimate FY18 Fiscal deficit at 3.5% of GDP.#Budget2018https://t.co/gKR9vSBO4F pic.twitter.com/jhgvV36HpJ
— BloombergQuint (@BloombergQuint) February 1, 2018
Shares of hospital operators rose after government proposed National Health Protection Scheme.
The government also laid its emphasis on improving the quality of education in the country. From training teachers to increasing the digital foundation in education, a whole host of announcements were made by FM Arun Jaitley.
Here are some of the key announcements:
Government will provide free LPG to 8 crore women. Will spend Rs 16,000 crore to provide free power.https://t.co/X5F1XA3rdU pic.twitter.com/pRSLRE0TUM
— BloombergQuint (@BloombergQuint) February 1, 2018
We will move forward from ease of doing business to improving ease of living for the poor and the middle class.”Finance Minister Arun Jaitley.
We have decisively reversed perception of India as part of the ‘Fragile Five’.Finance Minister Arun Jaitley.
Geoff Lewis To BloombergQuint
Maruti Suzuki India Ltd. sold 1,51,351 units in the month of January. The sales included 1,40,600 units sold in the domestic market while 10,751 units were exported.
While domestic sales grew 5 percent, exports saw a 2.8 percent growth compared to the corresponding period last year.
The Nikkei India Manufacturing Purchasing Managers' Index, or PMI, fell to 52.4 in January, reflecting a slower growth after the index reached a 5-year high at 54.7 in December 2017.
A reading above 50 indicates economic expansion, while a reading below 50 points toward contraction.
"Following December's stellar performance, growth in the Indian manufacturing economy lost some impetus, reflected by slower growth in output, new orders and employment. Nevertheless, these key PMI indicators registered in expansion territory signaling the sector stayed on its track to recovery," said Aashna Dodhia, economist at IHS Markit, which compiles the survey.
"New export orders increased at the strongest pace since September 2016. On the other hand, the Goods and Services Tax (GST) somewhat continues to remain a risk to business performance as firms faced further delayed payments," Dodhia said.
(Nikkei)
The 5 important numbers that you should watch out for in FM @arunjaitley #Budget2018 speech.https://t.co/4WEc2F8Jfc pic.twitter.com/aNYSbP2aNl
— BloombergQuint (@BloombergQuint) February 1, 2018
The CEA (Dr Arvind Subramaniam) has given his diagnosis. Let's see whether the patient (the government in charge of the economy) is still in denial or it will take corrective action.
— P. Chidambaram (@PChidambaram_IN) February 1, 2018
Market Expert Basant Maheshwari To BloombergQuint
What to expect from #Budget2018? We've got you covered.
— BloombergQuint (@BloombergQuint) February 1, 2018
Join us at 9.30 am.https://t.co/z3URB95H1q pic.twitter.com/RBJmbzkid2
Finance Minister Arun Jaitley arrives at the Ministry of Finance ahead of the #Budget2018 presentation in the Parliament today.
— BloombergQuint (@BloombergQuint) February 1, 2018
(Image Credit: @ANI)
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Indian automobile makers may clock strong sales in January on improved demand and consumer sentiment.https://t.co/RMYXaHhjqh pic.twitter.com/567UBiuVld
— BloombergQuint (@BloombergQuint) February 1, 2018
Road Transport and Highways minister Nitin Gadkari is confident that infrastructure will get top priority in the Union Budget. (Catch the exclusive interview here)
Besides that, Gadkari said that the government was waiting for NHAI to use its surplus funds before embarking on the bond issue. Gadkari also said there are plans to monetise 105 NHAI projects which will yield Rs 1.25 lakh crore.
What markets want from #Budget2018 and how they have reacted to Budgets in the past. @_nirajshah gets you all the details.https://t.co/4WEc2F8Jfc pic.twitter.com/ntwkokdqgn
— BloombergQuint (@BloombergQuint) February 1, 2018
Watch the entire discussion here
#BQExplains | What is fiscal deficit and why does it matter? #Budget2018https://t.co/Gu7KYy45Y4 pic.twitter.com/nF4Kl7lX3A
— BloombergQuint (@BloombergQuint) February 1, 2018
Watch the entire discussion with Ambit’s Saurabh Mukherjea and Hiren Ved of Alchemy Capital Management on their budget expectations here.
Read the full report here
After scoring a rare sovereign upgrade late last year, Modi will want to keep global investors and credit-rating companies on his side. Key to that will be sticking his goal to narrow one of Asia’s largest budget deficits.
HSBC expects India to miss its fiscal deficit target of 3.2 percent of gross domestic product for the year to March 2018, with the shortfall probably coming in at 3.4 percent amid slower growth, the chaotic implementation of the consumption tax that hit revenues, and a lower dividend from the central bank.
ICRA Ltd., the local arm of Moody Investors Service, estimates that a 10 basis-point expansion in the fiscal deficit-to-GDP ratio allows for extra spending of Rs 18,500 core ($2.9 billion).
Hello and welcome to BloombergQuint's coverage of the Union Budget 2018.
Finance Minister Arun Jaitley will step into the Lok Sabha today to present his fifth and final budget of his current term before the general elections in 2019.
Jaitley has a tough balancing act in the budget: maintaining fiscal prudence or handing out cash to placate rural voters ahead of next year’s election.
This budget has been in the news for a variety of reasons. The first after the implementation of the historic Goods and Services Tax (GST), the budget speech will not have an indirect tax component.
The focus will also remain on the government's fiscal trajectory. The Economic Survey suggesting a need for pause in fiscal consolidation and a fear of a higher-than-anticipated fiscal deficit target had worsened the sell-off in bond markets.
Also Read: Fears Of A Breach Of Fiscal Target Making Bond Markets Nervous, Axis MF Says
Comprehensive Budget 2026 coverage, LIVE TV analysis, Stock Market and Industry reactions, Income Tax changes and Latest News on NDTV Profit.
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