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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.

  • Prax says:

    >on 80 d -it is 20000 if the parents r senior citizens and it should not be paid in cash

    what do u think about the loan waiver effects?

  • Deepak Shenoy says:

    >prax: totally 20K? The speech says 15 k additional.

    This farm loan waiver. I don’t know. If the govt. pays for it, fine. Farmers are too big to fail in the time of coalition politics. If the banks are going to pay this is stupid. Obviously.

    But I will analyse the impact after some more details are clear.

  • techntrek says:

    >http://indiabudget.nic.in/ub2008-09/bill.htm
    finance bill ch3(2)
    please have a look and interpret

    on farmers
    i think it will be out of books style pmt through bonds as in psus but lets see – fiis are already a bit weary
    http://www.bloomberg.com/apps/news?pid=20601091&sid=a3yIYocDjW2Q&refer=india

  • Anonymous says:

    >Regarding 80-D:
    I pay every year for myself/spouse and my parents mediclaim (almost 32k). If my parents (senior citizens) were to pay by themselves then they would each get 20k deduction. But since I pay I could max. claim only 15k.

  • Anonymous says:

    >It is high time FM introduces deductions (New Sec. 80 B) for expenses incurred with filing income tax returns and getting refunds. The amount of charity demanded by IT staff is increasing every year. Last year I paid 15K to claim my TDS of 40k (NRO deposits). If you don’t they will put you under scrutiny.

  • Anonymous says:

    >Sorry for my earlier mistake. Checked with Eco. Times 80-D : it is 20K for senior citizens. That means a total of 20+15 K if one pays for self/spouse and parents who are senior citizens.

    Just for information: The health cover offered for senior citizens by various companies are rubbish. Compared to what Senior Citizens get from their Government in Developed countries. All hospitalisation, day to day medications etc. are completely covered till death. In India only hospitalisation upto limit of insurance is covered. Once the limit is reached policy lapses. It is a swindle.