<ul><li>Both Sensex and <keyword id="6354813" type="UNKNOWN" weightage="20" keywordseo="Nifty">Nifty</keyword> declined nearly a percent and half as Finance Minister Nirmala Sitharaman read her budget speech.</li><li>Markets were hoping for a big stimulus from the government to revive the economic growth which has hit a six and a half year low. </li><li>Changes to income tax slabs, passing of the tax on corporate dividends, liberalisation of education sector, the IPO of LIC, extended tax holiday for affordable housing were among the big proposals.</li></ul>India's <keyword id="35199" type="PERSON" weightage="20" keywordseo="stock-markets">stock markets</keyword> were unusually open on a Saturday, in anticipation of an 'economic stimulus', but as Finance Minister Nirmala Sitharaman went through with her speech, both Sensex , down nearly 700 points, and Nifty that was down about 220 points at 2:30 pm. Changes to income tax slabs, passing of the tax on corporate dividends, liberalisation of education sector, extended tax holiday for affordable housing, and the initial public offering of Life Insurance Corporation (LIC) were among the big proposals. However, the stock market did not seem very excited with the minister's proposals. "Investors stayed away from taking fresh positions ahead of the big event. Focus will turn to the Union Budget as all eyes will be on how Centre is going to bring growth as any increase in spending would result in widening of fiscal deficit. Global economy is also on the edge with slow growth fears significantly high after the outbreak of the virus," Vinod Nair, head of research at Geojit Financial Services told IANS earlier in the day. Insurance stocks like HDFC Life, ICICI Prudential, and SBI Life took a heavy beating, down anywhere between 5% and 8%, after the budget proposed the listing of LIC ⁠— the country's largest insurance giant with a corpus of ₹31 lakh crore⁠— that is likely to corner a lot of interest from investors. Technology stocks were propped up as the early part of Sitharaman's speech gave a lot of thrust to leveraging technology in a whole host of sectors from health and education to quantum computing and gene mapping. Even stocks like HUL, Asian Paints, and Bajaj Finance, which started the day on buoyant note hoping for sharp cuts in income tax and a boost for consumption including housing, gave up the early gains as the tax cuts proposed by the budget can be availed only if the taxpayer gives up on exemptions. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Income </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Previous Tax Rate </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">New Tax Rate </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Up to ₹2.5 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nil </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nil </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹2.5 lakh to ₹5 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">5% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nil </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹5 lakh to ₹7.5 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">10% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹7.5 lakh to ₹10 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">15% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹10 lakh to ₹12.5 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">20% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹12.5 lakh to ₹15 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">25% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Abover ₹15 lakh </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30% </td></tr></tbody></table> While Sitharaman said that a person earning up to ₹15 lakh a year can save up to ₹78,000 a year in taxes, if they give up on exemptions. These are some of the big highlights that are relevant to the share market: Cost to the exchequer ₹40,000 crore; Removed 70 tax exemptions and deductions. These new rates are available to those who forego exemptions, deductions, and rebates. Dividend distribution tax will be abolished, it will be taxable in the hands of the recipient. Cost to exchequer: ₹25,000 crore. ""The decision to remove dividend distribution tax was much-needed as it was resulting in triple taxation of corporate earnings. The shift to a simplified scheme of personal income tax is another welcome move as it removes distortionary influences in the individual’s savings choices even though the actual tax savings may not be significant for those who were availing deductions and exemptions," VP Nandakumar, MD &amp; CEO of Manappuram Finance Limited said. However, the stock of the company fell over 3.2% in trade. Shares of IDBI Bank surged as much as 17% after the Finance Minister said that the government will sell its remaining 47% stake (as of December 2019) in the bank. LIC owns 51% stake in IDBI Bank, the unlocking of value will make the insurance giant's IPO even more valuable. Zeal Aqua (up 14.4%), Waterbase (up 5.58%), Apex Frozen (up 4.55%), Avanti Feeds (up 2.93%) and Coastal Corporation (up 2.66%) gained due to a dedicated push for the fishing industry. Sitharaman said that the fish production will be increased 200 lakh tonnes a year and set a target of ₹1 lakh crore in fish exports. The education sector has been allowed to borrow money from abroad as well as to invite foreign students via a new entrance examination called the INDSAT. Shares of Navneet Education (up 2.33%), Zee Learn (up 2.19%), Career Point (up 1.98%) and MT Educare (up 1.97%), gained in trade. The speech discouraged the use of chemical fertilisers, and promote organic farming, dragging down stocks like Rashtriya Chemical Fertilisers. The ₹2.83 lakh crore allocation for agriculture, irrigation, and rural development did little to stokes of a revival in rural demand. Dividend distribution tax will be taxable in the hands of the recipient and not the company. This will cost 25,000 crore to the exchequer. Dividend and capital gains made by foreign funds on investment in infrastructure space will tax free. The budget also proposed to set up a 100 new airports in the next five years but stocks of airport construction majors like GMR Infra and GVK were down nearly 5% in afternoon trade. SEE ALSO: <a href="https://www.businessinsider.in/personal-finance/news/new-income-tax-slab-tax-savings-for-salaried-people/articleshow/73835816.cms">You'll save ₹78,000 more under new income tax slabs if you earn less than ₹15 lakh</a> <a href="https://www.businessinsider.in/budget/news/indian-government-infuses-22000-crore-in-power-and-renewable-proposes-freedom-to-choose-supplier/articleshow/73835587.cms">Indian government infuses ₹22000 crore in power and renewable, proposes freedom to choose supplier</a> <a href="https://www.businessinsider.in/budget/income-tax/news/check-out-new-income-tax-slab-of-2021/articleshow/73830824.cms">New income tax slabs 2020</a> <a href="https://www.businessinsider.in/budget/news/there-will-be-no-manual-cleaning-of-sewers-anymore-announces-nirmala-sitharaman/articleshow/73835265.cms">“There will be no manual cleaning of sewers anymore,” announces Nirmala Sitharaman</a> <a href="https://www.businessinsider.in/budget/news/union-budget-2020-live-updates-news-and-highlights/liveblog/73824572.cms">Union Budget 2020 Live Updates</a>

Indian markets aren’t excited because budget does not have the ‘stimulus’ they had hoped for

New Delhi, Feb 1 () Following are the top business stories at 1842 hours
 
DEL158 BIZ-2NDLD BUDGET
Sitharaman cuts income tax, abolishes DDT; to spend more on agri, infra to boost growth
New Delhi: Finance Minister Nirmala Sitharaman on Saturday slashed income tax for individuals, abolished dividend tax for companies and announced record spending in agriculture and infrastructure sectors to pull out the economy from its worst slowdown in more than a decade.
 
DEL146 BIZ-LD STOCKS
Budget blow for D-St: Sensex sinks 988 pts; Rs 3.46 lakh cr investor wealth wiped off
Mumbai: The Sensex logged its biggest single-day plunge in more than a decade on Saturday after the Union Budget failed to live up to market expectations of growth-boosting measures and fiscal discipline.
 
DEL122 BUD-INDUSTRY-REAX
India Inc terms Budget as growth provoking, says implementation crucial
New Delhi: India Inc on Saturday termed the Budget as "growth provoking and welfare inducing" but said that urgent implementation of the measures proposed will be crucial for achieving desired outcomes, while acknowledging that Finance Minister Nirmala Sitharaman had "little room" to manoeuvre.
 
DEL50 BUD-LIC
LIC to be listed: Sitharaman
New Delhi: Finance Minister Nirmala Sitharaman on Saturday said insurance behemoth LIC will be listed as part of the government disinvestment initiative. 
 
DEL163 BUD-DEPOSIT-INSURANCE 
Govt permits five-fold increase in deposit insurance cover to Rs 5 lakh per depositor
New Delhi: Finance Minister Nirmala Sitharaman on Saturday said the government has permitted DICGC to raise deposit insurance coverage by five times to Rs 5 lakh.

DEL96 BUD-LD DIVIDEND-TAX
Govt removes DDT; dividend to be taxed in hands of recipient
New Delhi: The government on Saturday proposed to remove dividend distribution tax on companies, and henceforth the tax will be shifted to recipients at the applicable rate. 
DEL54 BUD-FPI LIMIT
Plan to hike FPI limit in corporate bonds to 15% from 9%: FM
New Delhi: The government plans to increase investment limit of foreign portfolio investors (FPI) in corporate bonds from 9 per cent to 15 per cent, Finance Minister Nirmala Sitharaman said on Saturday. 
 
DEL124 BIZ-BUD-LD AGRICULTURE
Govt proposes 11pc hike in farm credit for FY21; announces Krishi Udaan &amp; Kisan Rail
New Delhi: The government on Saturday proposed 11 per cent increase in the farm credit target to 15 lakh crore for 2020-21 and announced special rail and flight services for the transportation of farm produce as its seeks to double farmers' income by 2022. 
DCM86 BUD-DISINVESTMENT
Govt pegs Rs 1.20 lakh cr disinvestment mop-up in 2020-21, Rs 65,000 cr in current fiscal
New Delhi: The government on Saturday pegged disinvestment target for 2020-21 at Rs 1.20 lakh crore, nearly double of Rs 65,000 crore it expects to raise in the current financial year. 
 
DEL129 BUD-HOUSING
Budget: Additional deduction of Rs 1.5 lakh on home loan interest extended till March 2021
New Delhi: Aiming to boost the affordable housing demand, Finance Minister Nirmala Sitharaman on Saturday proposed to extend the date of availing an additional Rs 1.5 lakh tax deduction on home loan interest by one more year till March 2021. 
 
DEL55 BUD- NOMINAL GDP
Nominal GDP growth for FY21 estimated at 10%: Sitharaman
New Delhi: Finance Minister Nirmala Sitharaman on Saturday said nominal GDP growth for 2020-21 is estimated at 10 per cent.
 
DEL147 BIZ-BUD-EXEMONS
Taxpayer opting for new tax regime to forego deductions on PF, tuition fee, insurance
New Delhi: A taxpayer opting for new income tax slabs and rates will have to forego a host of exemptions and deductions, including a standard deduction of Rs 50,000, tuition fee of children, and contribution towards insurance premium and provident fund.
 
DEL37 BUD-AIRPORTS 
100 more airports to be developed by 2025 to support UDAN scheme: FM
New Delhi: Finance Minister Nirmala Sitharaman on Saturday said 100 more airports will be developed by 2025 to support the UDAN scheme.
 
DEL94 BUD-RUPEE
For every rupee in govt kitty, 64 paise come from taxes
New Delhi: For every rupee in the government coffer, 64 paise will come from direct and indirect taxes, while states' share of taxes and duties is the single-largest expense head accounting for 20 per cent of the total spending, Budget documents showed. 
 
DCM79 BUD-LDALL STARTUP
FM announces host of steps to boost growth of startups
New Delhi: Finance Minister Nirmala Sitharaman on Saturday announced a host of measures including relaxing tax incentives and setting up of investment clearance cell for startups and entrepreneurs with a view to promote their growth.

DCM64 BIZ-BUD-G20
Govt allocates Rs 100 cr to host G-20 Presidency in 2022
New Delhi: Finance Minister Nirmala Sitharaman on Saturday said India will host the G-20 Presidency in 2022 and Rs 100 crore has been allocated for this purpose.
 
DCM90 BUD- LD ALL POWER SECTOR
Budget's push for clean air: Old thermal power plants to shut 
New Delhi: Old coal-fired power plants not meeting emission norms will be closed and their land put to alternative use, Finance Minister Nirmala Sitharaman said on Saturday as she provided Rs 4,400 crore in her Budget for measures to ensure clean air.
 
DCM35 BUD-LD MSME
Govt raises turnover threshold for audit of MSME accounts to Rs 5 cr
New Delhi: The government on Saturday unveiled measures aimed at facilitating growth of the country's micro, small and medium enterprises including raising the turnover threshold for audit of their accounts to Rs 5 crore and a scheme to provide subordinate debt to MSME entrepreneurs. 
 


 
 

 
 
 


 
 
 
 
 

 SHW
SHW

Business highlights

Budget overhang is likely to dominate trading pattern in the equity market this week, while participants will also keenly watch other developments like RBI policy, release of key macro data and quarterly earnings, according to analysts.
 Giving a thumbs down to the Budget, the market benchmark Sensex logged its biggest single-day plunge in more than a decade on Saturday after Budget presentation.
 Analysts said investors were disappointed as the Budget failed to live up to market expectations of growth-boosting measures and fiscal discipline.
 "The lack of major growth boosting measures in itself is negative for the equity market. The new income tax regime would also be negative for tax exempt equity savings schemes," Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares &amp; Stock Brokers said.
 Finance Minister Nirmala Sitharaman on Saturday slashed income tax for individuals, abolished dividend tax for companies and announced some measures for agriculture and infrastructure sectors.
 "Recasting of dividend taxation norms also seem to be on the balance negative for most domestic equity investors. Overall, the budget seems to be negative for the equity market," Hajra said.
 Further, income tax slab rejigs also stoked fears of declining inflows in tax-saving investment avenues. 
 "Income tax changes announced has come with riders of giving up exemptions which disappointed the markets, with insurance sector being impacted the most," Geojit Financial Services Ltd Head of Research Vinod Nair said.
 He further said that the flexibility shown in FY20 fiscal deficit is positive, but extending the same to FY21 would have provided more confidence to the market. 
 "Since the event is over, the focus will now turn to ongoing Q3 announcements and how global events unfolds in the near term," Nair added.
 The Reserve Bank will on Thursday announce its first bi-monthly monetary policy post-Budget. 
 PMI data for manufacturing and services sector are also due this week. 
 On corporate earnings front, Bharti Airtel, Lupin, Sun Pharma and Mahindra &amp; Mahindra are among the major companies scheduled to declare their October-December results this week.
 Concerns related to coronavirus may also dictate sentiments in the global as well as domestic market.
 On Budget day, the <keyword id="53232" type="COMPANY" weightage="20" keywordseo="BSE-sensex">BSE Sensex</keyword> ended 987.96 points, or 2.43 per cent lower, at 39,735.53. Over the last week, it plummeted 1,877.66 points to close below the key 40,000-mark. SUM RVK See Also: <a href="https://www.businessinsider.in/personal-finance/news/you-will-now-have-to-pay-14-5-tax-on-dividend-received-on-lic-policy/articleshow/73887794.cms?src=hp_ts">You will now have to pay 14.5% tax on dividend received on LIC policy</a>

Watch out for RBI policy review and earnings from Airtel, Lupin, Sun Pharma and M&M this week

<ul><li><keyword id="5936963" type="UNKNOWN" weightage="20" keywordseo="UPL-share-price">UPL share price</keyword> fell by 13%, touching ₹416 before staging a marginal recovery on December 10.</li><li>According to a report, a whistleblower alleged that <keyword id="10408335" type="UNKNOWN" weightage="20" keywordseo="upl-promoters">UPL promoters</keyword> siphoned off money using shell companies and rent deals.</li><li>The whistleblower – a board member – has also alleged that shell companies carried out other illegal transactions.</li><li><keyword id="333824" type="COMPANY" weightage="20" keywordseo="UPL">UPL</keyword> chief Jaidev Shroff issued a clarification, saying “the report is completely malicious.”</li></ul>The UPL share price plunged by over 13% on Thursday, December 10, after a whistleblower alleged that the company’s promoters siphoned off money. UPL is an agrochemical company, formerly known as United Phosphorus. The UPL share price at 11:40 am was ₹428.9, down by almost 13% compared to the closing price on December 9. <div type="image" title="UPL share price" msid="79658590" hostid="261" caption="&amp;lt;p&amp;gt;UPL share price&amp;lt;/p&amp;gt;"></div> According to an <a href="https://economictimes.indiatimes.com/prime/corporate-governance/eight-shell-firms-a-pali-hill-house-on-rent-whistle-blower-claims-upl-promoters-siphoned-off-money/primearticleshow/79650123.cms">ET Prime report</a>, a whistleblower has alleged that UPL entered into rent deals with a shell company owned by UPL employees. The report further added that UPL paid crores in rent for properties owned by the shell company, previously owned by UPL chief executive officer Jaidev Shroff. The report states that the whistleblower is a board member and has provided documents to corroborate their claims. It further notes that shell companies were used to carry out other illegal transactions. In a clarification issued to <a href="https://twitter.com/CNBCTV18News/status/1336892930334707712">CNBC-TV18</a>, Shroff said that “the report is completely malicious”. “Auditors had reviewed transactions between companies that had rented my residence. Rental agreement is cancelled, the house is no longer rented to UPL,” he added. Shroff also clarified that the company or its auditors had not received any fresh complaint. Its global auditor KPMG has not resigned yet, he said. UPL has a presence in more than 138 countries, employs nearly 10,000 people worldwide Thanks to its acquisition of Arysta LifeScience in 2019, UPL now has a presence in more than 138 countries and employs nearly 10,000 people across the world. Pesticides accounted for over 88% of the company’s sales in 2019. Here are some of the key metrics of UPL: <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Market capitalization </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$4.44 billion* </td></tr><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Revenue (FY20) </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$5.03 billion </td></tr><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Growth year-on-year </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">13% </td></tr><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Patents </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;background-color:#d9d9d9;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">1,266 </td></tr><tr><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Manufacturing facilities </td><td style="border-left:solid #000000 0.9978225000000001pt;border-right:solid #000000 0.9978225000000001pt;border-bottom:solid #000000 0.9978225000000001pt;border-top:solid #000000 0.9978225000000001pt;vertical-align:bottom;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">44 </td></tr></tbody></table> Note: Market capitalization is based on the UPL share price and USD-INR exchange rate as of 2 pm, December 10. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/lic-housing-finance-and-mahindra-finance-may-not-pay-dividend-after-rbi-restriction-on-nbfc/articleshow/79657063.cms">LIC Housing Finance and Mahindra Finance may not be eligible to pay dividends after RBI’s latest restrictions</a> <a href="https://www.businessinsider.in/stock-market/news/irctc-ofs-today-government-to-pare-20-stake-floor-price-set-at-16-discount-to-market-price/articleshow/79654705.cms">IRCTC tumbles 8% as government's 20% stake sale through OFS begins</a> <a href="https://www.businessinsider.in/stock-market/news/markets-off-record-high-sensex-drops-over-250-points-nifty-tests-13450/articleshow/79656573.cms">Markets off record high — Sensex drops over 250 points, Nifty tests 13,450</a>

Shares of UPL, India’s largest pesticide company, plunge by 13% after whistleblower alleges promoter fraud

<ul><li>New tax regime for NRI on income earned in India. </li><li>NRI classification changed for Indians living out of the nation for more than 245 days</li></ul>Finance minister Nirmala Sitharaman in her Budget for 2020-21 had proposed to tax Non-resident Indians (NRIs) who do not pay taxes in any foreign country. This provision raised anxiety in minds of those working in the Gulf region where countries don't tax income earned by foreign individuals. The new provision will only be applicable on the income earned in India through businesses and profession, and shall not be taxed if its earned in a foreign nation. Government said this is an anti-abuse provision since some Indian taking the privilege of their non-resident status shift their stay in low or no tax jurisdiction, to avoid paying taxes in India. The Union Budget for 2020-21 has tightened the laws on those seeking to escape tax by exploiting their non-resident status. Finance minister Sitharaman said Indian earnings of NRIs such as rental income from property in the country is what was intended to be taxed by way of the new provision. Earlier it was possible to be classified as a non-resident by staying out of the country for 183 days or about six months in a year and escape from paying taxes on any income earned, this has now been enhanced to 245 days. SEE ALSO: <a href="https://www.businessinsider.in/personal-finance/news/you-will-now-have-to-pay-14-5-tax-on-dividend-received-on-lic-policy/articleshow/73887794.cms?src=hp_ts">You will now have to pay 14.5% tax on dividend received on LIC policy</a>

Clarification on income tax payable by Indians employed in other countries

New Delhi, Mar 21 () With the coronavirus outbreak hitting businesses hard, industry body Assocham on Saturday said it has sought form the government a slew of measures to tide over this difficult economic situation.In a letter to Finance Minister Nirmala Sitharaman, it has suggested moratorium for a period of one year on debt repayments both for corporates and individuals.It has also urged the ministry for an urgent infusion of liquidity by the Life Insurance Corporation of India (LIC) into the Non Banking Financial Companies (NBFCs) in a quasi-equity format."Assocham has sought a blanket year-long moratorium by banks on debt repayment both for corporates and individuals as also urgent infusion of liquidity by the Life Insurance Corporation of India into the NBFCs in a quasi-equity format," Assocham said in a statement.The industry body said that as precautions are being taken amid outbreak of coronavirus, it would be prudent to put in place a strategy which will enable the economy to bounce back once things start returning to normalcy.Terming the outbreak of the deadly virus as "black swan", it said it has occurred at a time when the India's credit environment was "already fragile and the economy was slowing down."However, the difficult economic situation can be turned around with early financial measures, it said."Medium to long-term financing is key to stability of the crucial NBFCs which are one of the main sources of funding for the MSMEs, hit hardest by the Coronavirus crisis. The LIC investment into the NBFCs too would bear dividends for the state-owned insurance giant once fortunes turn for the overall economic cycle," Assocham President Niranjan Hiranandani said.He informed huge bail-out packages have already been announced in several major economies like UK, while the US is working on the packages which may exceed even a trillion dollar.For all present corporate loans which are impaired, the government and regulator should relax norms and allow a two-year window for the borrower and the lender to re-work the terms of loan based on the cash flow of the account. During that period, the loan account should be classified as 'standard' so that no provisioning is needed for the same, it suggested.The suggestions also included a thorough review of the NPA (non performing asset) guidelines and provisioning forms for the banks.It said "classifying an asset as NPA on the basis of number of days of dues unpaid is not quite in line with the global best practices."Assocham also suggested relaxation in section 29A of Insolvency and Bankruptcy Code (IBC) which as per the suggestion should be made applicable only in cases where perpetration of fraud by promoters has been established through a forensic audit."Otherwise, in cases where the promoters have been victims of circumstances or factors beyond their control, they should be allowed to bid for their companies during the resolution process. That would ensure better realization of value thereby improving the recovery by lenders," the body added. ABI MKJ

Coronavirus: Assocham suggests moratorium on debt repayments for corporates, individuals

In spite of major concessions announced by way of an ordinance in October 2019, the Indian economy continued to dwindle in the backdrop of the global economic meltdown. The current economic situation necessitated bold steps from our Hon’ble Finance Minister (‘FM’) to present a simplified budget that would result in a quick economic turnaround. However, whether such a ‘Simplified’ budget really unlocked potential for an economic turnaround, remains a question. Some key amendments coupled with their challenges are listed below: Some key amendments: Personal Tax Regime (‘PTR’): In line with the Concessional Tax Regime (‘CTR’) introduced by the Hon’ble FM in October 2019 which focused solely on corporates, a PTR has been introduced which focuses on providing alternative lower tax rates to individuals/HUF. The aforesaid concessional tax rate is applicable subject to the following conditions: <ol><li>The Individuals and HUFs having various incomes would not be allowed to claim any deductions/incentives, them being - <ul><li>Certain business <keyword id="891931" type="PERSON" weightage="20" keywordseo="deductions">deductions</keyword> and deductions from other incomes</li><li>House property deduction</li><li>Salary deductions including standard deduction and professional tax</li><li>Major deductions under Chapter VI-A (i.e. deductions under section 80C, 80D, etc) and</li><li>Set-off/carry forward of losses in relation to the above </li></ul></li></ol><ol><li>Further, <keyword id="1064766" type="ORGANIZATION" weightage="20" keywordseo="alternative-minimum-tax">Alternative Minimum Tax</keyword> (‘AMT’) shall not be applicable to an individual/HUF opting for PTR. Consequently, carry forward and set off of AMT credit shall not be allowed.</li></ol>In view of the above amendments, an individual having salary income as a major source of income and making investments in various schemes/instruments (For example, LIC premiums, PPF, ELSS, etc.) may not consider opting for PTR. It needs to be seen whether such a scheme is welcomed by the taxpayers at large or not. Dividend Distribution Tax (‘DDT’) Abolition: The Finance Bill proposes to abolish DDT in the hands of domestic companies and tax the same in the hands of the recipient. Accordingly, domestic companies declaring dividends shall be required to deduct TDS @ 10% on dividends exceeding INR 5,000 per shareholder. Further, it has been proposed to provide a deduction of interest expense of upto 20% of dividend income received in the hands of the shareholders under income from other sources. Lastly, in order to remove the cascading effect of taxes, dividend distributed by companies for a particular year (subject to conditions) shall be allowed as a deduction from dividend income. The benefit of deduction has also been extended to companies opting for CTR. However, the amendment leaves certain areas which need to be addressed: <ul><li>No scientific mechanism exists to allow deduction of expenses to the shareholders and only an ad-hoc deduction of interest expense capped at 20% of dividend income is allowed</li><li>In view of the above, the Company vs LLP structure needs to be re-evaluated</li><li>In case of banks and NBFCs where dividend income is a major source of business income, no separate provisions have been carved out</li></ul>Though the above is in line with the longstanding demand of the corporate world, only time will be able to tell whether the objective of earning higher taxes is achieved by these amendments. The above amendments also open-up the question of selection of an offshore jurisdiction for investing in Indian companies. Other Key Amendments A. Start-ups – Rationalising tax provisions and ESOP Taxation With a view to rationalise the tax deduction provisions for start-ups, the following amendments are proposed: <ul><li>100% profit deduction for an eligible start-up for any 3 consecutive years out of 10 years; and </li><li>Threshold of turnover for an entity, to be eligible as a start-up, has been increased to INR 100 Crores </li></ul> Further, in order to ease the burden of tax payment for employees of eligible start-ups, it is proposed to defer the timing of taxation of ESOPs perquisites. The amendment proposes to tax ESOP at the earliest of the following event: <ul><li>Expiry of 5 tears from the end of the relevant financial year; or</li><li>Date of sale by individual taxpayer; or</li><li>Date of cessation of employment</li></ul>These are welcome steps that would go a long way in providing ease of doing business for start-ups. Existing companies in the technology space must evaluate the possibility of obtaining necessary approval to claim exemption. B. Tax withholding on e-commerce transactions TDS @ 1% shall be made applicable on payments by e-commerce operators (who own/operate a digital e-commerce platform) to e-commerce participants (who sell goods/providing services/both). Further, exception is provided for payments to such a participant who is an individual/HUF if the transaction value during a particular AY is less than INR 500,000 This amendment will not only add compliance obligation on the e-commerce platforms but would also bring larger population of service providers and goods suppliers under the tax net. C. Increasing Tax Audit Turnover Threshold The FM proposes to increase the turnover threshold for tax audit applicability to INR 5 Crores, provided that the aggregate cash receipts/cash payments by such taxpayer do not exceed 5% of the total receipts/payments respectively during the financial year. This move is again intended with a view to move towards a cashless economy. D. Stay by the Hon’ble Income-tax Appellate Tribunal (‘ITAT’) ITAT may grant a stay of demand for upto a maximum of 365 days on a condition that the taxpayer deposits not less than 20% of the amount of tax, interest, fee, penalty, etc. Though the law seems to have been proposed, it would need to be seen whether condition can be applied to the judicial power of adjudicating authority. Since taxpayers at various levels are now being provided alternative tax regimes, the same may lead to complication of the tax regime with minimal benefits. TDS levied on dividend payments to shareholders/payments by e-commerce operators shall only increase the TDS compliance burden of large companies and e-commerce MNCs respectively. The impact of such complications and compliances on ease of doing business need to be evaluated. 
 <div type="image" title="Pranay Bhatia" msid="73984955" hostid="261"></div> Disclaimer: This article is written by Pranay Bhatia, a Partner and Leader of Tax &amp; <keyword id="344310" type="COMPANY" weightage="20" keywordseo="Regulatory-Services">Regulatory Services</keyword> at BDO India. The opinions expressed are entirely that of the author.

A top tax expert decodes the new Income Tax regime changes announced in the Budget

Mumbai, Feb 7 () Under criticism for not abolishing the long term capital gains tax (LTCG), Finance Minister Nirmala Sitharaman on Friday said her ministry will wait for one "normal year" before taking a call on the cess. On the dividend distribution tax (DDT), she clarified that the liability was shifted to the investor's applicable rate from the company to reduce middle-class investors' outgoes. Stock market benchmark indices had tanked by over 2.5 per cent on the budget day last Saturday. Experts opined that investors were peeved at the absence of any action on LTCG and the shift on DDT. Speaking to opinion makers and analysts in the financial capital, Sitharaman said the LTCG was introduced in 2018 and the volatilities in the markets have ensured that she cannot make a reasonable assessment on it. "Much before let us say I have burnt my fingers, I am told withdraw it. The reason why we didn't go that far on LTCG is because let us have an assessment at least one-year of a normal response to a tax. Lets us hope this year, after which we would take up considered view," she said. Revenue Secretary Ajay Bhushan Pandey said that the government's view is that all kinds of incomes need to be taxed, and not levying it on a particular stream like LTCG will create arbitrage opportunities. She had an interesting duel with veteran i-banker Hemendra Kothari and Motilal Oswal, the promoter of a brokerage house named after himself at the session over the two taxes. Oswal pointed out that the DDT move is pinching promoters dearly because they are anyways in high tax bracket and claimed that the overall outgo is going till 58 per cent. "You (Oswal) are talking about one section, whereas we thought that we want to put money in the hands of the other section which is the retail," she said. When Oswal replied saying promoters may not declare dividends at all because of the tax liability, Sitharaman had an interesting retort. "Will the shareholders be tempted to go to the company which does not pay dividends?" Later, she clarified at a press conference that a lot of thought was given to the issue of DDT. "The middle class will pay lesser than what they were paying. a middle-class shareholder will have more money now," she said. Meanwhile, on concerns regarding an ambitious divestment target of Rs 2.10 lakh crore, Economic Affairs Secretary Atanu Chakraborty said they are confident of achieving the "reasonably decent" target. He said there are spillover transactions of BPCL and Concord, IDBI Bank and LIC on the financial side, which will ensure that the money gets mopped up. Additionally, there is also up to Rs 70,000 crore from minority stake sales in companies which the government will be collecting, he said. Chakraborty also said that spectrum sale revenues on 5G or AGR receipts are not included in the Rs 1.33 lakh crore target from the communications front, exuding confidence that the ministry will be able to mop-up the figure. He said routine spectrum license fee payments alone will deliver up to Rs 65,000 crore. Meanwhile, Sitharaman lauded the "dynamism" of Reserve Bank in responding to the budgetary move by extending the restructuring scheme for small businesses, and also welcomed the changes on cash reserve ratio against lending to certain sectors of the economy. On the changes in the cooperative banking laws, she made it clear that the powers of the registrar of cooperative societies at the state level have not gone down but explained that the monitoring of entities has gone up to restore credibility in banking. "If you are being called a 'bank', it will be only then that it will be regulated by the RBI so that the credibility of the banking functions in India are kept intact," she said. AA MRMR

FinMin to wait for one more year to take call on LTCG tax: Sitharaman

New Delhi, Feb 1 () Finance Minister Nirmala Sitharaman on Saturday slashed income tax for individuals, abolished dividend tax for companies and announced record spending in agriculture and infrastructure sectors to pull out the economy from its worst slowdown in more than a decade.
The cut in income tax rates, which would help save about Rs 31,000 a year in tax for persons with annual income of up to Rs 17 lakh, was however conditioned on current exemptions and deductions including standard deduction for Rs 50,000 as well as the waiver earned on payment of up to Rs 1.5 lakh in tuition fee of children, and contribution towards insurance premium and provident fund, being given up.
She raised import duty on a variety of products ranging from tableware and kitchenware to electrical appliances to footwear, furniture, stationery and toys to boost domestic manufacturing while at the same time provided funds to help farmers set up solar power generation units and set up coal storages to transport perishables.
Alongside, the limit of insurance cover in case of bank failure on deposits was increased to Rs 5 lakh from Rs 1 lakh and a sale of government stake in the country's largest insurer Life Insurance Corporation (LIC) announced.
Presenting her second budget in Parliament, Sitharaman said the 2020-21 Budget was aimed at boosting incomes and enhancing purchasing power, stressing that the economy's fundamentals were strong and inflation was well contained.
For farm and rural sectors, she allocated Rs 2.83 lakh crore and fixed Rs 15 lakh crore target for giving agriculture credit. Another Rs 1.7 lakh crore spending was planned for transport infrastructure and Rs 40,740 crore allocation was made for the energy sector.
In doing so, the government will miss its deficit target for the third year in a row, pushing shortfall to 3.8 per cent of GDP in the current fiscal as compared to 3.3 per cent previously planned. The fiscal deficit target for the coming fiscal year starting April 1 has been fixed at 3.5 per cent.
Sitharaman, who cut tax paid by companies to its lowest in September last year, proposed new tax slabs of 15 per cent and 25 per cent in addition to the existing 10 per cent, 20 per cent and 30 per cent. The new slabs would be for individuals not availing certain specified deductions or exemptions.
Under the proposed I-T slab, annual income up to Rs 2.5 lakh is exempt from tax. Those individuals earning between Rs 2.5 lakh and Rs 5 lakh will pay 5 per cent tax. A 10 per cent tax will be charged on income between Rs 5 and 7.5 lakh, 15 per cent, 20 per cent and 25 per cent on next Rs 2.5 lakh each and 30 per cent on income above Rs 15 lakh.
"Currently, annual income up to Rs 2.5 lakh is exempt from income tax. While a 5 per cent tax is charged for income between Rs 2.5 and 5 lakh. 20 per cent for income between Rs 5 lakh and Rs 10 lakh and 30 per cent for those earning above Rs 10 lakh.
"The new tax regime shall be optional for taxpayers," she said.
Sitharaman accepted the demand of the industry to reverse the taxability of dividends back to the recipients, making equity investment more attractive. Now, dividends will be taxed in the hands of recipients, a move that will cause Rs 25,000 crore dent to her coffers.
Also, she deferred taxes for ESOPs in the hands of employees which will be an important decision for the employees to own shares in the employer without getting worried about organising cash to pay taxes. This will also provide greater flexibility to the employers and employees in the structuring of their employment prospects.
One proposal that could be become contentious was tax being imposed on Indian citizens abroad if they are not taxable in their home country.
For the next fiscal, she pegged net borrowings of Rs 5.45 lakh crore and doubled target of raising revenue from the sale of government stake in PSUs to Rs 2.1 lakh crore. ANZ MKJ

Sitharaman cuts income tax, abolishes DDT; to spend more on agri, infra to boost growth

<keyword id="6354743" type="LOCATION" weightage="20" keywordseo="Amazon-India">Amazon India</keyword> and Flipkart are studying the Budget proposal on levy of one per cent TDS, and will reach out to the government for clarifications. "We are studying the details, and will reach out to the government for clarifications. We hope the tax regime is simple and uniform so that millions of small and medium businesses can go online, digitise their operations and continue to contribute to growing the economy," an Amazon India spokesperson said in response to an e-mailed query. Flipkart also said it was going through the proposal.
 "We are studying the details, particularly how it impacts the MSMEs and Sellers on our marketplace platform. We will discuss further with our seller partners, and engage with government and other stakeholders in due course," Flipkart said in its response.
 The government on Saturday proposed a new levy of 1 per cent TDS (tax deducted at source) on e-commerce transactions, a move that could increase burden on sellers on such platforms.
 "In order to widen and deepen the tax net by bringing participants of e-commerce (sellers) within tax net, it is proposed to insert a new section 194-O in the Act so as to provide for a new levy of TDS at the rate of one per cent," according to Budget 2020-21 documents.
 The amendments will take effect from April 1, 2020.
 The documents said the e-commerce operator -- an entity owning, operating or managing the digital platform -- will have to deduct 1 per cent TDS on the gross amount of sales or service or both. This provision will not apply in cases where the seller's gross amount of sales during the previous year through e-commerce operator is less than ₹5 lakh and the seller has furnished his PAN or Aadhaar number.
 An industry expert said the move will reduce cash flow for sellers as cash will be stuck with government in refund system. Given that many sellers are micro, small and medium enterprises, it would add pressure on them.
 BookMyShow Head (Finance) Mitesh Shah said compliance on e-commerce has been increased by mandating them to deduct a TDS of 1 per cent on all goods and services sold on e-commerce platforms.
 "This would be in addition to TCS (tax collected at source) under GST (goods and services tax) and this amendment might further increase the cost of compliance for e-commerce companies," he added.
 A senior industry executive, who did not wish to be named, said levying the one per cent TDS on 'sales proceeds net of commission, shipping fees, listing fees etc' would have been more beneficial than the current proposal of the levy being imposed on gross sale. SR MSS
BAL See Also: <a href="https://www.businessinsider.in/personal-finance/news/you-will-now-have-to-pay-14-5-tax-on-dividend-received-on-lic-policy/articleshow/73887794.cms?src=hp_ts">You will now have to pay 14.5% tax on dividend received on LIC policy</a>

Amazon, Flipkart and Bookmyshow need clarity on additional TDS imposed by Budget 2020

Mumbai, Feb 2 () The revised 3.8 per cent fiscal deficit for FY20 looks ambitious as it is based on projected 18 per cent rise in tax collections against a paltry 5.1 per cent higher realisaition so far, and around Rs 65,000 crore mop-up through disinvestment in the last two months of the current fiscal, SBI Research said in a report on Sunday.
The revised deficit target is propped on the belief that the divestment will fetch Rs 65,000 crore through the next two months. As against the Rs 1.05 lakh crore budgeted target, the divestment proceeds has been one of the lowest in recent years at a paltry Rs 17,800 crore.
The Union Budget for 2020-21 used the permissible 50 bps deviation under Section 4(3) of the FRBM Act to widen the fiscal deficit at 3.8 per cent of the GDP, revealing a revenue shortfall of around Rs 2.60 lakh crore, of which states are losing Rs 1.09 lakh crore.
"After adjusting for the expenditure rationalisation of around Rs 88,000 crore, the revised fiscal deficit for FY20 comes to around Rs 63,086 crore over the budgeted numbers. The saving grace is the jump in non-tax revenue of around Rs 32,335 crore or 20 bps of fiscal deficit, possibly reflecting the AGR payments/interim dividend from RBI in lieu of telecom.
"Clearly, the Supreme Court judgement has helped the government contain fiscal deficit at 3.8 per cent instead of 4 per cent. If this amount goes up (potentially up to Rs 90,000 crore) the fiscal deficit number can even be lower than 3.8 per cent or alternatively it can be possible that any slippage in disinvestment receipts/tax receipts could be taken care of," SBI Research said in the report.
However, the problem is that the "revised estimates pegs income tax collections growing at 18 per cent as against 20 per cent budgeted earlier, which in our opinion, is a tad optimistic as the year-to-date FY20 collections as on December is only 5.1 per cent higher year-on-year," the report said.
The only saving grace has been for the second time in the fiscal after the April collections GST mop-up crossed Rs 1 lakh crore-mark at over Rs 1.2 crore.
FY21 nominal GDP growth is projected at a reasonable 10 per cent, says the report and pegs real GDP numbers for FY21 to be 5.5-6 per cent and fiscal deficit at Rs 29,491 crore, more than the FY20 revised number of 3.5 per cent of GDP.
On the new income tax regime leading to a consumption boost, the report said that the new tax regime will most likely makes no sense as given the optionality clause wherein income tax rates will be significantly reduced for the individual taxpayers who forgo certain deductions and exemptions. The new personal income tax rates will entail estimated revenue forgone of Rs 40,000 crore per year.
"Assuming a marginal propensity to consume of 0.70, the proposed revenue foregone of Rs 40,000 crore will translate into a consumption boost of Rs 1.33 lakh crore, but only if people migrate to the new tax regime.
"Our estimates suggest that given the increased tax liability under the alternative dispensation, such a possibility of migration looks remote. We are thus sceptical of a consumption boost," the report said.
Many analysts and tax experts have already flayed the move on income tax front, saying this will badly hit savings by way of investing in select assets classes likes mutual funds, housing and even stock markets as dividend distribution will also be taxed at the hands of the investor.
The budget has set an all-time high target of Rs 2.1 lakh crore of disinvestment for FY21 on back of the planned stake sale in LIC and the pending/remaining disinvestments of FY20. The disinvestment target of FY20 is now revised downwards from Rs 1.05 lakh crore to Rs 65,000 crore.
"We believe 10 per cent nominal GDP growth for FY21 can surprise on the upside, thanks to a lower base in FY20. Because, with FY19 growth now at 6.1 per cent, FY20 growth on an unchanged base can potentially be at 5.7 per cent, against 5 per cent earlier. This implies there could downside bias to 5 per cent GDP estimate in forthcoming CSO releases that can push up nominal GDP growth in FY21," it noted.
Gross tax revenue is expected to grow by 12 per cent in FY21 to Rs 24.2 lakh crore. This revenue target from taxation is supported by 10.4 per cent growth in custom duty, 14 per cent in income tax and 11.5 per cent rise in corporation tax.
Tax buoyancy for FY21 is estimated at 1.2 times. GST collection target is budgeted to increase at 12.8 per cent to Rs 6.9 lakh crore over FY20 revised estimates.
Major subsidies will remain flat at Rs 2.28 lakh crore.
For FY21, the government borrowing is budgeted at Rs 7.8 lakh crore and net borrowing requirement is pegged at Rs 5.40 lakh crore, considering repayments of Rs 2.39 lakh crore.
Total dividend from the Reserve Bank of India, banks and financial institutions is estimated at Rs 89,648 crore for FY21, almost 41 per cent lower than revised estimated of FY20 (Rs 1,51,636 crore), on the basis of a lower dividend transfer from the apex bank.
Considering declining tax revenue, non-tax revenue for meeting fiscal deficit is the key. 
"Using the data from FY1972 to FY2017, our econometric estimates show that neither non-tax revenue growth causes GDP growth, nor GDP growth causes non-tax revenue growth.
"While the government taking recourse to non-tax revenue is fine this depends on growth picking up. In fact, higher non-tax revenues can cause sectoral imbalances. A case in point is the telecom sector which witnessed a rise in leverage in 2010 after the major spectrum auctions," the report said. BEN BAL
BAL

3.8 pc fiscal deficit target looks ambitious: SBI Research

Mumbai, Feb 1 () The non-banking finance sector, which has been down in the dumps since September 2018, has heaved a sigh of relief with the Union Budget offering a slew of measures to boost their liquidity and asset recovery.
 The shadow banking sector, which also includes housing finance companies, has been struggling ever since the bankruptcy of IL&amp;FS in September 2018 which created a crisis of confidence for the system and the resultant snapping of credit flow to them.
 The Budget stated that the limit for NBFCs to be eligible for debt recovery under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, is proposed to be reduced from Rs 500 crore to asset size of Rs 100 crore or loan size from the existing Rs 1 crore to Rs 50 lakh.
 Welcoming the budgetary measures for NBFCs, State Bank of India (SBI) Chairman Rajnish Kumar said this will lead to better recovery and borrower discipline in the sector.
 Leading industry player Tata Capital's Rajiv Sabharwal said the budget has offered many positive measures to boost the NBFC and HFC sector which will increase the flow of liquidity.
 "Budget has taken specific measures like enhancement of FPI limits in corporate bonds, abolishing of the dividend distribution tax and extension of the partial credit guarantee scheme. Lowering the threshold limits for accessing Sarfaesi Act benefit will further ease the recovery mechanism," Sabharwal said.
 Vishal Kampani of JM Financial Group said the budget is a mixed bag for embattled NBFCs, which were waiting for big incentives to get out of the current squeeze.
 "Yet some announcements like the tweak in eligibility limit for debt recovery, and reduction in loan size directly and the push to MSMEs will indirectly support NBFCs. More importantly, NBFCs will now be pinning hopes on the promises to ensure fund flow and revision of the partial credit guarantee scheme to come out of the current crisis," Kampani said.
 Jaspal Bindra, chairman of the Centrum Group, also expressed disappointed with the budget saying "not enough has been done for the banking and financial services sector".
 The mega challenge is around credit growth and the resultant liquidity crisis, which has not been addressed, he said.
 Thomas John Muthoot of the Muthoot Pappachan Group said the measures announced for farm sector will have a ripple effect on the NBFC sector.
 Ratings agency Brickwork Ratings said the increase in agriculture financing to Rs 15 lakh crore for fiscal 2021 enhances banks' dependence on NBFCs towards on-lending or kick-starting co-lending. This will improve the resource profile of NBFCs.
 Also, allowing smaller NBFCs to use the Sarfaesi Act and also to smaller ticket loans will help accelerate recovery in this segment and improve their asset quality. That apart, the partial credit guarantee scheme has supported the liquidity profile of NBFCs. But the budget offers no specific redressal to address NBFCs exposure to stressed real estate sector which is a major disappointment, it said.
 Gold loan player Manappuram Finance's VP Nandakumar said relaxation given to NBFCs for debt recovery is a welcome step even as it was looking forward to eventual parity with banks.
 Also, enabling NBFCs to extend invoice financing to MSMEs through TReDS will help increase the flow of credit to MSMEs.
 Ashwini Mehra of Duff &amp; Phelps the budget empowers NBFCs to go for hard recovery measures and reduce the stress in their balance sheets. The restoration of health of the NBFC sector has to be a priority given their relative efficiency in credit delivery and last mile reach.
 Siddhartha Mohanty of LIC Housing Finance said the time extension till March 2021 for additional Rs 1.5 lakh interest subsidy for affordable housing is a welcome step. Also, the tax holiday on profit would encourage more builders to take up affordable housing projects, individual can firm up home buying decision to enjoy the additional tax benefit of Rs 1.50 lakh.
 Shachindra Nath of Ugro Capital said, "The reduction in the NBFC eligibility for SARFAESI Act to Rs 100 crore from Rs 500 crore AUM will boost the confidence among small NBFCs and reduce the cost of borrowing for MSMEs. The proposal to allow NBFCs to extend invoice financing to MSMEs will boost productivity in the sector."
 Hemant Kanoria of Srei Infrastructure Finance said extension of the partial credit guarantee scheme for NBFCs can address their liquidity issues. BEN ABM
ABM

NBFC players say budget offers some hope, finally

Mumbai, Feb 1 () Bankers said the Union Budget is a balanced one as it maintains fiscal prudence for the medium-term and also offers more capital spending to support the sagging growth.
 The budget has pegged fiscal deficit at 3.8 percent for the current fiscal and 3.5 percent for the next, Finance Minister Nirmala Sitharaman said while presenting the first full budget of the Modi government's second term.
 Bankers said given the deepening slowdown, the move was much needed and it will boost government spending to support economic growth.
 Welcoming the budget, State Bank of India (SBI) Chairman Rajnish Kumar said the proposals will ensure better infrastructure with better connectivity on one hand and improved healthcare and better access to education on the other and both will have long lasting impacts.
 "The new income tax regime without exemptions is a move to a regime of a simplified and clutter-free taxation," he said, adding the five-fold hike in deposit insurance limit to Rs 5 lakh was long overdue.
 He also said the relaxation in the Sarfaesi norms for NBFCs will lead to better recovery and borrower discipline in this sector. "Overall, the budget numbers are realistic and the staggered transition to a lower fiscal deficit is in perfect consonance with the growth objective," Kumar said.
 HDFC Bank's Chief Economist Abheek Barua sees the budgetary numbers as credible in terms of the fiscal math as it has correctly recognised revenue shortfall this year. "It uses up the 50 bps point leeway that the FRBM Act provides for both FY20 and FY21 which is a welcome step," Barua said.
 The 13 per cent spike in capital expenditure in FY21 with increased allocations for education, healthcare and certain schemes in the agricultural sector are big positives, he said, but was quick to add "that said, this expenditure increase, coupled with income tax cuts, does not seem to suggest a large fiscal stimulus that the current slowdown perhaps warranted."
 The tax breaks offered to foreign investors and specifically to sovereign wealth funds, acknowledge the fact that there is a fundamental mismatch between supply of domestic savings and capital needed for accelerated growth, he said, adding this along with the abolishment of dividend distribution tax is likely to help attract foreign fund flows.
 Budget finely balances the objectives of supporting growth while adhering to fiscal prudence in the medium-term, Standard Chartered India Chief Executive Zarin Daruwala said.
 Yes Bank Managing Director Ravneet Gill said the budget reiterates the goal of fiscal consolidation by targeting a fiscal deficit at 3.5 percent next fiscal year after slipping it by 50 bps at 3.8 per cent for FY20.
 ICICI Bank's B Prasanna said the budget is focused on holistic growth objectives by resorting to the escape clause permitted by the FRBM Act even as the commitment to consolidation remains in place.
 Gill said the higher budgetary provision for the rural sector at 13.4 per cent in FY21 will help boost rural purchasing power.
 On the investment front, increase in the capital expenditure ratio to a four-year high of 1.8 per cent of GDP generates hope of crowding in of private investment, Gill said. 
 While there is an allocation across many segments, the budget does not have a significant thrust on any one particular sector or a "big bang" announcement, Kotak Mahindra Bank's Shanti Ekambaram said, adding "a lot was expected to give a big boost to infrastructure, but perhaps the devil is in the details."
 The rural economy including agriculture, which is a very critical component of the economy, received a lot of granular allocation, she said. 
 Bank of India Managing Director A K Das said the budget is forward looking as it aims to revive demand and growth.
 "The feel good elements include sizeable increase in DICGC insurance threshold, subordinate debt facility and extension of restructuring window for MSMEs, liquidity support to NBFCs and tax holiday in the affordable housing segment," Das said.
 Syndicate Bank Managing Director Mrutyunjay Mahapatra, said the budget is a combination of continuation of the initiatives, prioritisation and incentivisation of key focus areas and a set of new experiments.
 StanChart's Daruwala further said the budget rightly attempts to boost spending by enhancing non-tax revenues through higher disinvestments including stake sale in LIC and IDBI Bank.
 Bandhan Bank's Chandra Shekhar Ghosh said hiking deposit insurance to Rs 5 lakh will help drive confidence among banking depositors.
 DBS Bank India's Surojit Shome said the budget reflects the government intent to boost consumption and support inclusive growth. The revision of the income tax rates and the option for individuals to opt for a simpler and lower tax regime is likely to incentivise consumer spending and stimulate demand, Shome said. HV BEN ABM
ABM

Bankers say balanced budget to spur growth, draw in investment

New Delhi, Feb 1 () BJP-ruled states hailed the Union Budget as focussed on boosting development, creating jobs and taking every section of the society along, but those governed by the opposition parties expressed disappointment saying it lacked vision to revive the economy.
Uttar Pradesh Chief Minister Yogi Adityanath, Haryana CM Manohar Lal Khattar and their counterparts from Karnataka and Goa - B S Yediyurappa and Pramod Sawant - said the budget will help generate jobs, boost rural economy and create infrastructure for growth. They thanked Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for the budget.
 Assam Chief Minister Sarbananda Sonowal termed the budget "pro-people" since it was structured on the overall theme of 'Ease of Living'.
"I congratulate Finance Minister Smt. @nsitharaman ji for a common man centric budget, and for taking ahead Prime Minister Shri @narendramodi ji's vision for a robust and vibrant India," Sawant added in a tweet.
But West Bengal Chief Minister Mamata Banerjee, Delhi CM Arvind Kejriwal and their Maharashtra and Madhya Pradesh counterparts - Uddhav Thackeray and Kamal Nath - were not impressed by the budgetary proposals.
Banerjee slammed the central government's proposal to sell a part of its shares in LIC, describing it as a plan to "ambush" the legacy of public institutions. Thackeray and Kejriwal alleged the budget gives "step-motherly" treatment to Maharashtra and Delhi.
Nath termed the budget "disappointing" and a "labyrinth of data", saying it lacked a plan to deal with the economic slowdown and the inflation.
"When Delhi doesn't figure in the BJP's priorities, why should people vote for it?" he said on Twitter in Hindi. "Delhi had high expectations from the Budget, but step-motherly treatment has been meted out to it again," Kejriwal said.
His deputy and Delhi Finance Minister Manish Sisodia too criticised the budget as the "biggest injustice" to the people of the national capital.
At a press conference, he pointed out that the Centre has allotted Rs 325 crore to the Delhi government as central taxes share, which is the same since 2001. He alleged Delhiites give Rs 1.5 lakh crore as taxes to the Centre annually, but it doesn't give anything to the Delhi government.
Punjab Chief Minister Amarinder Singh said economy was not a priority for the government, trashing the budget as "high on pomposity and low on tangibles". He said the BJP-led Central government, which was too busy pursuing its "negative and divisive agenda".
Singh particularly highlighted that the "16-point action plan for agriculture" makes no mention of any initiatives or schemes to encourage crop diversification, and a failure to diversify would further aggravate the problems for the country on the agriculture front.
Terming the budget "a jugglery of words", Rajasthan CM Ashok Gehlot said there was no focus on providing relief to people or industries. "Budget speech lacked any substance to solve present economic crisis. It was simply jugglery of words without any focus on providing relief to common people or to industries," Gehlot tweeted.
The Rajasthan BJP countered Gehlot's charge, saying the budget was "balanced and inclusive" and Finance Minister Sitharaman appropriately focussed on all sections.
"Changes in income-tax slab is a big relief to middle class. Every section has been focused. Budget provisions for the welfare of all sections and sectors including education, health, infrastructure development, tribals, senior citizens have been made," BJP state president Satish Poonia said.
Industry bodies in Rajasthan gave a mixed reaction to the budget.
Federation of Rajasthan Trade and Industry chairman Suresh Agrawal said looking at the present economic situation, businesses and industries had big expectations from the budget.
"The budget should have been more focused on business and industries. Exporters, textile and automobile industries will be benefitted with the budget but MSME sector's expectations were not met," he said.
Confederation of Indian Industry's Rajasthan chairman Anand Mishra said the budget has covered many items. "There is a good outlay of Rs 2,500 crore in tourism which we are sure that Rajasthan will be able to take benefit. The removal of dividend tax would lead to investment in stock market."
Haryana CM Khattar too highlighted the budgetary provisions made for the tourism sector, thanking Sitharaman for announcing that Rakhigarhi, an Indus Valley Civilisation site, will be developed as "iconic sites" with on-site museums.
He said this move will give Rakhigarhi international recognition and boost tourism revenue for Haryana.
"This Budget will also prove to be a milestone in terms of developing the basic infrastructure of the country, farmers' growth, jobs for youth and betterment of health facilities in the country,"
Adityanath said, adding the budget protects the interests of each section of the society.
His deputy Dinesh Sharma said the Union Budget will fulfil the dream of "New India".
"It will also lay the foundation of a USD 5-trillion economy. The New Educational Policy will bring a revolution in the education sector. Study in India programme will publicise India's higher education."
Yediyurappa said the emphasis on rural India in the budget will benefit farmers in a big way.
"This budget is a boon for farmers. It's a clear reflection of the Prime Minister's desire to double farmers' income by 2022. The 'Jal Jivan' scheme extended to 100 water-stressed districts will benefit farmers in a big way," he added.
Kerala Chief Minister Pinarayi Vijayan said the budget would not help strengthen the economy or ensure social security, but it will increase inflation and unemployment. He also said that "legitimate needs" of the southern state were completely ignored in the budget. TEAM ABH
ABH

You Searched For "LIC dividend" and got 15 results

Indian markets aren’t excited because budget does not have the ‘stimulus’ they had hoped for

Sriram Iyer

Business highlights

PTI

Watch out for RBI policy review and earnings from Airtel, Lupin, Sun Pharma and M&M this week

PTI

Shares of UPL, India’s largest pesticide company, plunge by 13% after whistleblower alleges promoter fraud

Rounak Jain

Clarification on income tax payable by Indians employed in other countries

Navdeep Yadav

Coronavirus: Assocham suggests moratorium on debt repayments for corporates, individuals

PTI

A top tax expert decodes the new Income Tax regime changes announced in the Budget

Pranay Bhatia

FinMin to wait for one more year to take call on LTCG tax: Sitharaman

PTI

Sitharaman cuts income tax, abolishes DDT; to spend more on agri, infra to boost growth

PTI

Amazon, Flipkart and Bookmyshow need clarity on additional TDS imposed by Budget 2020

PTI

3.8 pc fiscal deficit target looks ambitious: SBI Research

PTI

NBFC players say budget offers some hope, finally

PTI

Bankers say balanced budget to spur growth, draw in investment

PTI

BJP-ruled states praise 'pro-people' budget, others say it lacks vision to revive economy

PTI

Here’s how the advertising and marketing industry reacted to Union Budget 2021

BI India Partner