Reactions from Finance Industry leaders
Devam Sardana, Business Head, Lemonn: “A lot of people are asking about the impact of STT, STCG and LTCG on the equity market participants but instead of the impact of direct factors, I believe the removal of indexation benefits on real estate, gold, etc. will have a major impact on the equity markets and participants (and that too a positive one). From a real estate standpoint, I see 3 major things: Secondary market for real estate will be hit as sellers will be unwilling to absorb the full impact of the potential tax increase (no indexation benefits). Buyers looking to invest in property (beyond residential use) will step back a bit. The government recognises this and has therefore “urged” states to reduce stamp duties. Potential cash transactions or share of cash in real estate might increase, leading to increased scrutiny of real estate transactions. Overall, this makes real estate as an asset class less attractive compared to pre-Budget rules. Of course, if one is looking to re-invest capital gains from real estate in another property, there is no change for them. With regards to the question on STT, STCG and LTCG, there is minimal impact on the equity markets but when looked at the competitors of equity as an asset class namely gold, real estate, investors can breathe a sigh of relief!”
Tarun Singh, Managing Director of Highbrow Securities: “The Union Budget has impacted the buoyant stock market, but its effect feels more symbolic than substantial. The fundamental impact on investors will be negligible, as any changes in capital gains taxation will soon be factored into future plans. The market sentiment will remain conducive for investors. The budget’s incremental yet pivotal steps towards fostering an inclusive manufacturing and MSME landscape are commendable. The proposed initiative lays a sustainable and secure foundation for investors to explore emerging opportunities within this vital economic segment. One of the key standout aspects of this budget is its respect for the existing consumption patterns. In the market realm, consumption is king, and any disturbance to this trend could ripple negatively across the economic spectrum. By preserving the status quo here, the budget has safeguarded the ongoing consumption story that fuels market growth. The Stock Markets, thus, can absorb minor setbacks and continue on a bullish path, backed by stable and robust consumer demand.”
Ashish Singhal, Co-founder, CoinSwitch: “We welcome the Union Budget 2024-25 as a pro-development budget bringing great news for startups. As a founder and angel investor, I’m thrilled that the Angel Tax has been abolished. This will significantly bolster the entrepreneurial ecosystem in India. The emphasis on digital public infrastructure and the digitalization of the economy will greatly benefit tech startups like ours, which are focused on developing population-scale apps for Indians.”
Himanshu Kohli, Co-founder, Client Associates: “Similar to previous budgets by this government, the emphasis remained on responsible fiscal management and increased investment in capital expenditure… The government reaffirmed India’s strong macroeconomic fundamentals despite a challenging global economic environment. Therefore, the critical priority areas laid down in the budget were all geared towards promoting the economy's long-term growth, which is also inclusive. While changes in the capital gains tax may have a short-term impact on the markets, they are expected to contribute to a more rational investment environment in the long run.”
Harsh Gahlaut, Co-founder & CEO, FinEdge: “Individual tax payers have reasons to rejoice with more money in their hands. With Standard Deduction being hiked from 50,000 to 75,000 and a change in tax slab under the new regime, the average taxpayer would be able to save Rs.17,500 in taxes. The increase in Long Term Capital Gains from 10% to 12.5% and STCG from 15 to 20% will affect the post-tax returns for investors, however, the silver lining comes from exemption on LTCG being increased from 1 lac to 1.25 Lacs.”