by admin | May 25, 2021 | Business
New Delhi : Congress President Rahul Gandhi on Thursday promised incentives for entrepreneurs and start-ups to boost job creation in the country, saying there will be no permissions required for the first three years of any new business, no angel tax and sold incentives based on the number of jobs created.
He also promised easy bank credit if the party is voted to power in the Lok Sabha elections.
“Youngsters, Want to start a new business? Want to create jobs for India? Here’s our plan for you: 1. ZERO permissions for the first 3 years of any new business. 2. Goodbye Angel Tax 3. Solid incentives & tax credits based on how many jobs you create. 4. Easy Bank Credit,” Gandhi said in a tweet.
The move is seen as an effort by Gandhi to woo the youth ahead of Lok Sabha elections and keep the focus on economic issues.
Gandhi has been criticising the ruling BJP and Prime Minister Narendra Modi for failing to create promised jobs and the issue is a major poll plank of the Congress .
The promises are part of Congress plan to boost employment opportunities if it comes to power and provide a viable roadmap to achieve the objectives.
–IANS
by admin | May 25, 2021 | Corporate, Corporate finance, Corporate Governance, Economy, Markets, News
New Delhi : Setting aside all conventions with an eye on the coming elections, Finance Minister Piyush Goyal on Friday showered tax sops for the middle class and salaried tax payers including zero tax liability for those with income is up to Rs 5 lakh and announced an annual income support of Rs 6,000 for small farmers and contributory pension for labourers in the demonetization-hit unorganized sector.
Taking the place of an ailing Arun Jaitley, in his 100-minute speech, Goyal also announced raising the Standard Deduction for the salaried class and pensioners from Rs 40,000 to Rs 50,000 and proposed exemption from tax on notional rent on second self-occupied home. This would help families maintaining homes at two locations due to their jobs.
In a big relief for the middle income group, he increased the rebate under Section 87A of the Income Tax Act from Rs 2,500 to Rs 12,500 – the equivalent of 5 per cent tax on Rs 2.5 lakh to Rs 5 lakh slab – and also raised the eligibility criterion for claiming the rebate to Rs 5 lakh from Rs 3.5 lakh earlier. This effectively reduces the tax liability of those with net taxable income upto Rs 5 lakh to nil.
However, tax liability for those with net income above Rs 5 lakh would still start from Rs 2.5 lakh as earlier. The Interim Budget neither changed the existing tax rates or the slabs.
The tax giveaways involve a revenue sacrifice of Rs 23,100 crore a year to benefit more than three crore salary earners and pensioners – Rs 18,400 crore on account of Rs 12,500 tax rebate and other changes and Rs 4,700 crore on account of raising the standard deduction.
In the wake of the BJP’s defeat in the Hindi heartland states in December on perceived stress in agriculture and informal sectors, the Budget came out with a direct income support of Rs 6,000 per annum for small farmers with land-holding size up to two hectares which would be transferred directly into their bank accounts.
The scheme would be funded completely by the Central government and would directly benefit 12 crore farmer families, he said to the cheers of the ruling benches.
Acknowledging reduced returns for farmers due to falling food prices in the international market and declining inflation, Goyal said the scheme would be implemented from December 1 last year for which Rs 20,000 crore has been allocated in the revised estimates for the current fiscal and Rs 75,000 crore in the Interim Budget for the whole of next fiscal.
For the demo-hit unorganised sector, Goyal announced a contributory pension scheme providing for Rs 3,000 per month on attaining 60 year that will benefit 10 crore workers in the unorganized sector.
Those who enter the scheme at 18 years will have to pay a monthly premium of Rs 55 while those who enter at 29 years will have to pay Rs 100 per month till they reach 60. The government will contribute a matching share in the pension account of workers.
This scheme, he said, will be implemented from the current year and a sum of Rs 500 crore has been allocated and more will be given if needed.
In a big relief to pensioners and senior citizens, he also raised the threshold for Tax Deduction at Source (TDS) on interest received on bank deposits from Rs 10,000 to Rs 40,000, and TDS on rent from Rs 180,000 to Rs 240,000.
“Once you account deductions under Section 80(C), middle class tax payers with gross income upto Rs 6.5 lakh will have no need to pay income tax,” he said amidst prolonged thumping of desks by the ruling NDA members who kept shouting “Modi, Modi, Modi”. The Prime Minister was himself seen thumping the desks every time Goyal made fresh announcements.
Taken along with Standard Deduction and other sops like interest paid on home loans, education loans, contribution to National Pension Scheme, medical insurance premium and medical expenses on senior citizens, the effective exemption would go up further.
He said while the changes in the tax structure would be made in the regular Budget, people needed a certainty in their minds in the beginning of the year about what taxes they would have to pay and went on to announce the tax sops in the Part B of his speech.
The budget also stepped up defence allocation which he said will be crossing Rs 3 lakh crore for the first time in 2019-20. “If necessary, additional funds would be provided for securing our borders and to maintain preparedness of the highest order.”
Part of the funding for the agriculture and unorganized sector schemes may come from the Rs 20,000 hike in the RBI and PSU dividends from Rs 54,000 crore in 2018-19.
Turning to macro finance in the budget, Goyal revised the fiscal deficit target for 2019-20 at 3.4 per cent of the GDP, up by 0.1 per cent targeted this year.
“We would have maintained fiscal deficit at 3.3 per cent for 2018-19 and taken further steps to consolidate fiscal deficit in 2019-20. However, considering the need for income support to farmers, we have provided Rs 20,000 crore in the revised estimate of the current fiscal and Rs 75,000 crore in the budget estimates of 2019-20.
“If we exclude this, the fiscal deficit would have been less than 3.3 per cent for 2018-19 and less than 3.1 per cent for 2019-20.”
The Interim Budget pegged the total expenditure for 2019-20 at Rs 27,84,200 crore, up from Rs 24,57,235 crore in the revised estimates of the current fiscal, which is a rise of approximately 13.3 per cent.
At the outset, Goyal said the paralysis of the past had been broken and India solidly put back on track and marching towards growth and prosperity.
The government had succeeded in breaking the back of the “back breaking” inflation which stood at 2.19 per cent in December. “If we had not controlled inflation, our families would have been spending around 35 to 40 per cent more today on basic necessities.”
Critics of the budget said the exercise was one of optics and rhetoric. They raised questions like where the money would come for funding the schemes to benefit farmers and labour in the unorganised sector.
The government may bank on the gross borrowing that has been estimated at over Rs 7 lakh crore but on the direct taxes front contrary to claims of buyoancy and compliance ramping up, there is a defict.
Government sources indicated that all eyes would now be on RBI Governor Shaktikanta Das, who was appointed recently, to come to the aid of the government to come out with an interest rate cut on the back of a benign inflation.
—IANS
by admin | May 25, 2021 | Economy, News, Politics
P. Chidambaram
New Delhi : Congress leader and former Finance Minister P. Chidambaram on Tuesday slammed the BJP government for the “crushing tax burden” due to the prices of petroleum products, saying it has become a “people vs government” issue.
Chidambaram in a series of tweets said that people were seeking relief from the tax burden of the prices of petroleum products.
“Every rupee cut in tax on petrol/diesel will result in LOSS of Rs 13,000 crore says government. Every rupee tax on petrol/diesel will result in BURDEN of Rs 13,000 crore say the people,” he said.
“Whose interest should prevail? The interest of the government or the welfare of the people? Crushing tax burden on petrol and diesel has made this into a People vs Government issue,” he added.
The Congress has been accusing the Narendra Modi government of failing to curb the rise in the prices of petroleum products.
Last week the petrol price in Delhi was the highest in nearly five years and diesel prices also touched fresh record levels.
—IANS
by admin | May 25, 2021 | Economy, Markets, News
By Porisma P. Gogoi,
Mumbai : The Indian equity markets witnessed the steepest fall since November 2016 — when demonetisation was put into effect — after the long-term capital gains (LTCG) tax on equities was re-introduced in the Union Budget for 2018-19, leading the Sensex to shed over 800 points and the Nifty50 over 200 points in a single day.
Breaking an eight-week winning streak, the key equity indices gave way to the bears following a huge sell-off in the markets on the last trading day of the week.
On a weekly basis, the barometer 30-scrip Sensitive Index (Sensex) tanked 983.60 points or 2.73 per cent to close trade at 35,066.75 points.
The wider Nifty50 of the National Stock Exchange (NSE) closed the week’s trade at 10,760.60 points — shedding 309.05 points or 2.79 per cent from its previous week’s close.
Market observers said disappointing announcements in the Budget like on the LTCG tax and a higher-than-expected fiscal deficit target for 2018-19 dampened the risk-taking appetite of investors.
“Domestic markets closed lower as investors were disappointed after the government proposed 10 per cent LTCG tax on equity gains above Rs 1 lakh in the Union Budget. The sentiments also got spooked after the finance minister revised upward its fiscal deficit target,” D.K. Aggarwal, Chairman and Managing Director of SMC Investments and Advisors, told IANS.
“Also, market mood got badly suffered after Fitch Ratings on Friday said high debt burden of the government constrains India’s rating upgrade. Meanwhile, the divestment target for 2018-19 has been set at Rs 80,000 crore,” he added.
In the Budget announced on Thursday, Finance Minster Arun Jaitley proposed to tax LTCG on equities exceeding Rs 1 lakh at 10 per cent, which is expected to bring in revenue of Rs 20,000 crore.
The government also revised upwards its fiscal deficit target for 2017-18 to 3.5 per cent of the gross domestic product, or the equivalent of Rs 5.9 lakh crore, which was higher than the earlier target of 3.2 per cent for the current fiscal.
“The week gone by saw the Nifty correcting sharply. This week’s losses came after eight consecutive weeks of gains,” Deepak Jasani, Head, Retail Research, HDFC Securities, told IANS.
“Sectorally, there were no gainers. The top losers were the realty, pharma, PSU banks and energy indices,” he added.
On the currency front, the rupee weakened by 51 paise to close at 64.06 against the US dollar from its last week’s close at 63.55.
Provisional figures from the stock exchanges showed that foreign institutional investors purchased scrips worth Rs 2,099.45 crore, while domestic institutional investors worth Rs 145.73 crore during the week.
Figures from the National Securities Depository (NSDL) revealed that foreign portfolio investors bought equities worth Rs 2,923.18 crore, or $460.08 million, during January 29 and February 2.
Arpit Jain, AVP at Arihant Capital Markets, said: “This week, the Indian equity benchmarks fell 2.75 per cent the most since demonetisation week.”
“Both the indices fell by 2.4 per cent a day after government announced to tax equity investments held for more than a year to boost its revenue,” Jain told IANS.
The top weekly Sensex gainers were: Mahindra and Mahindra (up 1.73 per cent at Rs 768.50); Indusind Bank (up 1.54 per cent at Rs 1,755.60); Hero MotoCorp (up 1.51 per cent at Rs 3,623.65); Tata Consultancy Services (up 1 per cent at Rs 3,149.15); and Hindustan Unilever (up 0.11 per cent at Rs 1,372.70).
The losers were: Dr. Reddys Lab (down 15.25 per cent at Rs 2,122.10); Tata Steel (down 8.60 per cent at Rs 669.70); Axis Bank (down 7.95 per cent at Rs 564.95); ONGC (down 7.59 per cent at Rs 192.45); and Bharti Airtel (down 6.81 per cent at Rs 421.80).
(Porisma P. Gogoi can be contacted at porisma.g@ians.in)
—IANS
by admin | May 25, 2021 | World
Washington : US Senate and House Republicans have struck an agreement on a sweeping tax-cut bill that, if passed, would be the first major piece of legislation signed by President Donald Trump, the media reported.
Senate Republican leaders shared the details of the revamped bill with members of their conference on Wednesday and Speaker Paul Ryan updated his colleagues later in the day, reports The Hill magazine.
“I’m confident we’ll pass the bill next week,” Senate Republican Whip John Cornyn, a member of the Senate-House negotiating conference, told reporters.
Republican leaders plan to hold an initial procedural vote on December 18, a final Senate vote on December 19 and then send the measure to the House for final passage.
Senate Majority Leader Mitch McConnell heralded the development as something that would boost the middle class.
“We want to take more money out of Washington’s pocket and put more money into the pockets of the middle class. I’m confident the conference committee will finalize a bill that does just that,” he tweeted.
Senate negotiators convinced their House counterparts to preserve two important middle-class tax breaks: the deduction on student loan interest and the exclusion for tuition waivers received by graduate students, reports The Hill magazine.
The bill would also cap the popular mortgage interest deduction at $750,000, a midpoint compromise between the Senate and House bills.
Negotiators were still working on how many tax brackets to set, said congressional aides. Republican senators said they expected the final bill to tilt toward the seven brackets they passed in their version.
Lawmakers were rushing to get the bill done before the Christmas holiday.
The legislation will repeal the federal mandate requiring people to buy insurance – a core piece of ObamaCare.
The bill also would give some relief to people in high-tax areas by allowing them to deduct up to $10,000 in state and local taxes.
Meanwhile, a provision to set a corporate alternative minimum tax – which would have raised $40 billion over 10 years – has been stripped out.
—IANS
