EY India's Pranav Sayta Discusses Impact Of Tax Changes On Capital Markets And Angel Tax Abolition | NDTV Profit - video Dailymotion

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00:00Ranav, you want to comment on this? Are you impressed by the fact that they have reduced it from 5.1 to 4.9 and for next year sub 4.5

00:09Absolutely, I think that's a great move. They have tasted success over the years because of the great macro management I would feel

00:17and that continuity is very evident. They have not compromised on the fiscal deficit at all. In fact they have improved significantly

00:24So I would think full credit to the government for this through the period particularly also in this budget

00:30Despite all the expectations of welfare measures being higher and so on. So I think it's a great move

00:37Yes of course from the direct taxes side also there are lots of measures. Maybe we can come to that

00:43So let's unpack it one by one. Let's start with the capital markets focused tax changes

00:49So long term capital gains tax, short term capital gains tax, some categories for 2 years, some for 1 year and STT

00:56So let's unpack that portion first

00:58So I would feel that the short term capital gains tax increase from 15 to 20% was something that I wouldn't say was completely unexpected

01:08given that probably they wanted to temper the short term trading a bit and that might have been the provocation as well as raising some revenue

01:16Also some amount of equity in taxation if a salary tax payer, a normal business income, small business earner pays tax at 20-30%

01:25Short term capital gains tax probably they wanted to show some equity as well

01:30So that's something that was pretty expected in some sense by me at least

01:34The long term capital gains tax was a little of a surprise, yes indeed

01:39and I don't know how the market will take it because I don't think the market expected it as well

01:44Not too well so far

01:45Yeah, not 12.5 but I think that looks a little early in stage in terms of implementation

01:54I would have felt that given that there is an STT in place, given that the collections from STT are so robust

02:00given that they want to give a fillip to the domestic capital being invested in risk bearing financial assets

02:08which has been going so well, that's one move that I thought was a little earlier than what I would have expected in the normal course

02:16But certainly I think overall the steps have been good

02:20Another thing which of course one has to see the fine print but it seems that debentures etc also

02:27might probably go into the normal tax rate bracket instead of the 20%

02:33So last year we saw the indexation benefit go away on mutual funds and so on

02:39and now if the concessional tax rate also on that capital gain goes which one has to see the fine print

02:45if it goes into the regular slab rate that might be another big move

02:50But that could be good for deposits

02:52That could be good for fixed deposits and probably that has been the provocation

02:56That seems to be the provocation to bring

03:01Also MLDs is such a small

03:05That's dead already

03:07A couple of years ago

03:10We killed direct access to bond markets now

03:15That extra incentive that you had versus mutual funds

03:18If you go to mutual fund you get taxed as normal in fixed income

03:22But in the bonds if you were listed and you bought

03:26There was a capital gain of listed instead of concessional rate

03:29That's gone

03:30So in some sense it's fair right

03:32Ravi is directly investing and I am investing through mutual fund

03:35Why should he benefit

03:37Why should I not be same as him

03:41So in some sense it's a fair thing to do

03:43And it's for the super smart dudes in this country

03:46The treasury guys

03:47The big quantum of money

03:48The big H&I

03:49This government let's level it all

03:52Sabka saath sabka vikas

03:55Ok Mr. Setha anything else on the tax front

03:58Because there is lot of other stuff

04:00I would feel again abolishing angel tax

04:03Is a big positive especially for entrepreneurs, small businesses, startups

04:09The whole ecosystem

04:11And including for foreign investors who always wanted to enter the private equity and VC fund so to say

04:17So I think that's a great move indeed

04:20The dropping of the foreign companies corporate tax rate from 40 to 35 was again something that was very very welcome

04:27I think it was expected as well because when the corporate tax rate on Indian companies came down

04:32They had not brought the foreign company corporate tax rate down

04:35So I think that again is a good leveling off in terms of both foreign companies as well as Indian companies

04:43Also some of the trust building measures

04:45The TDS rate rationalization etc seems to be a good move, very good move indeed

04:50Again focus from a personal income tax standpoint on the new tax regime

04:56Increased standard deduction and some amount of new tax regime tax reduction

05:01Do you think it brings it on par because the problem was always to move people from old tax to new tax

05:07The new guys are happy to come into new tax

05:09But if you are already used to all those section 80C benefits it's difficult to wean them off

05:14Does this bring more parity on the face of it?

05:17I would feel again those who probably get the allowances of HRA etc

05:22Are going to continue to want to stay in the old regime

05:25But most others I think are slowly moving into the new regime

05:29There are only big allowances which are more in the nature of house rent allowance etc

05:33Which will probably stay out

EY India's Pranav Sayta Discusses Impact Of Tax Changes On Capital Markets And Angel Tax Abolition | NDTV Profit

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