Expect an anti-rich Budget 2017; realty buyers should watch out, says Ambit

1. Expect an anti-rich Budget 2017; realty buyers should watch out, says Ambit A recent report by Ambit capital suggests that Budget may be focussed on black money crackdown' Expect an anti-richBudget 2017; realty buyers should watch out, says Ambit on Business Standard. A recent report by Ambit capital suggests that Budget may be focussed on black money crackdown'

2. The Union Budget this year seems particularly important in the aftermath of the India’s biggest decision of 2016 – demonetisation and preceding elections in UP. A recent report by Ambit capital suggests that Union Budget is likely to be focussed primarily on reinforcing the ‘black money crackdown’ theme with a secondary focus on delivering token payments to the poor as well as income tax cuts. Even though it was a massive political success, it’s still unclear if the experiment worked for the government in its stated attempt to curb black money or raise the tax base by bringing a larger share of unaccounted income. According to the report by the brokerage firm, the government is expected to announce an ‘anti-rich’ budget with a secondary focus on: delivering token payments to the poor; and tax cuts for the middle class Setting the scene for cashless economy and curbing more black money for the coming months, the budget might include the below features: •An adverse decision on the Capital Gains Tax front:The Government might tweak the definition of ‘long term’ thereby raising the limit for capital gains tax relief to a minimum of three years from one year at present for equity funds. The changed definition would imply that investors will have to pay a 15% tax on the premium or gains made if the stock is sold within three years. •Steps to create penalties for undertaking cash transactions:Going forward, the Government seems likely to introduce rules to disincentivise usage of cash. It is worth noting that the Supreme Court- appointed Special Investigation Team (SIT) on black money has recommended that the Government should make cash transactions above Rs30,0000 and possessing more than Rs 15,00,000 at a given time, illegal. We believe that the Government might consider either or both options to dissuade cash transactions.

3. •Measures to prevent withdrawal of cash from the banking system: The economic think tank, Arthakranti which was the first body to moot demonetisation has also recommended imposition of tax on ATM withdrawals and eventually replacing this with a banking transaction tax (BTT). The Government may consider the same in a bid to build the perception that such a move penalises those who operate in cash. •As intensification of tax raids:Both to boost tax revenues and to perpetrate the ‘black money crackdown’ theme, we expect the Government to intensify tax raids in FY18. Another major feature for the Union Budget 2017 will be the tokens and tax cuts that are likely to be delivered in FY18. Read Article Source>>> Get all the Stock Market News & Latest Business News