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Economy

Budget 2008: Short Term Cap Gains Up, Service Tax Extras and Relief

Short Term Capital Gains Tax up to 15%

The FM has rationalised this by saying it needs to be equal to dividend distribution tax, and to promote longer term investing.

STT will be a business expense, and Introduction of CTT

Securities Transaction Tax is no longer an advance tax, it’s a set off against income, as a business expense. Doesn’t affect the salaried, only those that file business income returns.

On the lines of STT, a tax called Commodities Transaction Tax will be paid by commodity traders

Stock Exchanges, Clearing houses, AMC services to ULIPs to pay service tax

Earlier, these services were out of the service tax net. Now they’re in. Meaning you will probably need to pay a wee bit more on your transactions on stock exchanges. And please, for heaven’s sake, don’t buy ULIPs.

Banking Cash Tax OUT the door

I don’t know who ever paid this tax, but they don’t have to pay it any more. So withdraw as much cash as you like. Just make sure it’s in your account first.

Service Tax limit up to Rs.10 lakhs

Nice for small companies like ours or for startups who are renting offices for less than 10 lakhs a year. You don’t need to pay service tax until your turnover crosses Rs. 10 lakhs.

Additional Rs. 15K off for Medical Insurance

If you pay it for your parents.

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