Budget 2024: Indexation Benefits On Non-Financial Assets Axed; Experts Analyse Market Impact | NDTV Profit - video Dailymotion

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00:00Big changes are afoot on the taxation front and good changes from the sound of it, right?

00:05So I think what we have Mayusha from Ernst & Young as well who's in the studios with us, but indexation benefit

00:11We believe on real estate gold and other non-financial assets has been abolished and there's a change in treatment of

00:17LTCG. Mayush, you picked this up a few minutes ago while we were all disappointed

00:22What was happening on LTCG from 10 to 12 and a half, but I believe on real estate

00:26It's actually reduced. So this could be good news for real estate companies and gold companies. That's right

00:31So, you know, you are right in terms of tax rate

00:34It has gone down from 20 to 12 and a half percent for long-term capital gain arising on account of property sale or any other assets

00:43However at the same time, you know

00:45What they have done is they've withdrawn the indexation benefit which otherwise which was available for any property

00:51Which was transferred from today onwards. So till today if any property has been transferred

00:56It will definitely get indexation benefit, but thereafter it will not get any indexation benefit. Can you simplify this for us?

01:03Sure. So let us say that, you know, if a property is sold, you know

01:07Say on 1st of July, you will get the indexation benefit on sale of such property

01:12But if you are selling anything after today, then that property will not have any indexation benefit available to them

01:19But property is an asset class which can't be sold just like that

01:23So suffice to say that indexation benefits on real estate are gone. It's gone. Absolutely, right now

01:29This could be a big negative impact, right?

01:31It would have negative impact coupled with that tax rate has gone down from 20 to 12 and a half

01:37So to that extent I believe, you know, it will set off the impact

01:40But it is it is simplifying that now indexation and all that we don't have to recalculate calculate and things like that

01:46It becomes very simple and I think the markets are seeming to like it because all your real estate stocks are reacting

01:51negatively to their news flow in fact from the likes of an Oberoi Realty to

01:55Every other one on the street that we're seeing a Phoenix Mills are all trading deeply in positive territory

02:00They may be off their days high point, but still looking good. What about gold you want to take us to because it's a

02:06Non-financial assets, I'm guessing there's real estate and then there is gold as well. That's right

02:10So you want to walk us through what has changed for gold taxation and what could it mean for the company?

02:16So companies like a Titan, a Senko, is there a direct correlation?

02:19Yeah, so what happens is that when any gold is bought as a capital asset

02:25Earlier, we used to take indexation benefit and we used to pay tax at the rate of 20 percent

02:31now what is happening that same like immobile property if we are selling off any gold or any other item as

02:37As a capital asset in that case now no indexation benefit is available at the same time

02:43And the tax rate has gone down from 22 to L and a half

02:46So to an extent, sorry does your math suggest that this seven and a half percent downtick in capital gains rate

02:54Kind of equates with the indexation benefit that came in for very old properties or gold bought way earlier 20 years ago

03:01I'm guessing the indexation benefits would still be higher than the seven and a half percent reduction

03:05Let's look at it because we had to replace the fair market value as on first April 2001

03:11Right and indexation has started from that that point onwards

03:16so if we look at now 300 percent is what the

03:20Kind of upside we could have availed right because of the index in the inflation index in number exactly now

03:28When tax rate has gone down it has not gone down to that effect exactly

03:33Right. It's not gone down by 300 percent. So you will have some net for something that was bought way earlier

03:38It's still a negative but for a lot of stuff which has been bought in the recent past that did reduction in tax rate nullifies the

03:46Indexation benefits going away. And this is being in line with the global practices. Got it. Because a

03:52Non-resident investing in India if they have to go through though non-residents are not entitled to indexation benefit

03:58But like India Indian people who are investing abroad

04:01They are taking indexation benefit as well as currency exchange benefit

04:05Now they will be able to have only one benefit and it will be unifying because then you can claim all the credits which has

04:11Been paid in foreign country over here and vice versa

04:13So it will kind of simplify from an international standpoint and it will be aligned with the global tax policies

04:20So this is also for financial assets outside the country. So if you're going out and buying

04:26Funds or stock say in the US the same

04:30Applies to these. That's right. And that's also a big piece by the way with the LRS being, you know

04:35Utilized at most people who live in this country. This could be one more

04:40Factor to watch out for. Mayur anything else that stood out?

04:43I think we've highlighted most of it

04:44But you want to share with us your thoughts on what have you made of the changes as as as a whole on the personal

04:51taxation front. See the way I look at

04:54Budget is you know, they are simplifying a lot of things which was kind of creating a lot of complexity

05:00especially when you are going to digitalize everything the challenge is is that when you fill up the form it is so lengthy and

05:08Cumbersome so right. So this will kind of simplify so much that you know, nobody would need any consultant like me

05:16So you might be out of a job. You're not worried about that. No

05:19One thing one last question actually and this holding periods being now just two holding periods like 12 months and 24 months

05:25That's right itself. Is that a big big? It's a big change

05:28It's a big change big change because earlier, you know, what I said will be qualifying as a long term

05:34Depending upon the type of visits we used to decide what should be the long term and what should be short term now

05:39It is very simple 12 months and 24 months. Got it. Anything which is being held for 12 months is long term and

05:46rest is

05:47Got it. Okay, my usha. Thank you so much for bringing us this piece of update as well

05:52So for real estate gold or non-financial asset investors, it's a big change on the taxation front as well must say the markets have

06:00behaved

06:02Fairly, okay

06:040.7 0.8 0.8 percent lower look at that volatility though, and this was anticipated kush bora is with us kush

06:11what stands out in terms of the charts currently on specific pockets because

06:17FMCG Titan etc are all really running amok

06:22Hi, Neeraj. First up. Let me just give you a quick update on something. I would discussed in the morning, which is Bank Nifty

06:27We were talking about a constant writing, you know in the call options a constant pressure on the call options and the 52,000

06:35Put option, you know that we discussed with a target of 700. Well the high for that was sixty nine point nine five

06:40So I think that pressure is going to continue if the Bank Nifty does indeed close below 51 800

06:46Then I think you know, we could slide to 50,000 or maybe just a little under as well

06:50So that's a bit of a caution on the Bank Nifty now

06:53You're right as far as you know, the sectors go the consumption sector is a standout right now

06:59Titan's seen a massive short covering

07:01So I think this could continue but perhaps 3,500 is the level where it will hold because there's a 200-day moving average

07:06Pressure as well the quality

07:09Okay, because just before you move ahead

07:11So viewers just want to mark one is Titan and look at that seven and a half percent uptake in the session

07:16So big big move for Titan that is one and then you look at FMCG names as well

07:21I think those two have had a good move ITC and some of the others have had a serious up move there

07:26Kush any thoughts here?

07:28I think that a couple of stocks stand out for me Godrej consumer products Tata consumer products. I think some of these continue to

07:35Do well, they were doing well before the budget as well

07:38And you know this Philip is just going to boost the rally that you know

07:41So Godrej consumer product is perhaps something that I would buy perhaps hold at, you know current levels also

07:46Just a few Andhra stocks that are actually doing quite well

07:49So pull up KCP NCL Deccan all those stocks are actually looking good though anything to do with Andhra and companies also

07:57Having a pretty pleasant day

07:59There you go. Aditya vision if you can pull that one up to let's see what other their vision is getting up to but

08:04KCPL is up 3% Aditya vision which was trading negative

08:07At the start of the budget had moved in a there you go 4% on KCP

Budget 2024: Indexation Benefits On Non-Financial Assets Axed; Experts Analyse Market Impact | NDTV Profit

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