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<keyword id="20207838" type="General" weightage="20" keywordseo="dsp-mutual-fund" source="keywords">DSP Mutual Fund</keyword>'s September 2024 Netra report credits <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword>'s strong economic recovery to increased fiscal expenditure. The report, which tracks current economic trends and market insights through various charts, emphasizes the need for the private corporate sector and households to play a larger role in sustaining the ongoing growth momentum. Netra also pointed out an unsettling calm in the markets, with the Nifty 50 TRI index maintaining an impressive 53-month streak without a 5% decline and 13 years without a drop greater than 10%. Sahil Kapoor, Head of Products and Market Strategist, DSP Mutual Fund, said, "The calm in the markets, marked by an unnerving lack of volatility, is a double-edged sword. While it provides a sense of stability, it also masks underlying risks that could surface unexpectedly, catching investors off guard. To ensure a sustainable recovery, there is a need for the private sector and households to take the lead, transforming fiscal stimulus into lasting economic growth." However, the report notes a shift in market dynamics, with the momentum factor, which has outperformed since the COVID-19 bottom, beginning to lose its dominance. At the same time, the quality factor, which had underperformed over the last four years, is now seeing a resurgence, potentially indicating a change in market leadership that could favour quality-orientated funds, both active and passive. The report highlights the critical role government spending has played in the recovery, with a focus on capital investments crucial for future growth. However, contributions from the private corporate sector and households have lagged. It also draws attention to a slowdown in India's per capita consumption, approaching lows seen in previous cycles. Given that consumption accounts for around 60% of GDP, it is vital that this sector grows at a rate exceeding GDP growth to stimulate private capital expenditure. India's <keyword id="487578" type="General" weightage="20" keywordseo="tax-collections" source="Orion">tax collections</keyword> have demonstrated robust growth, with gross tax revenue showing a five-year compound annual growth rate (CAGR) of 14 %. This growth, largely driven by <keyword id="6354751" type="General" weightage="20" keywordseo="income-tax" source="Orion">income tax</keyword>, indicates a rising dependency on capital gains and stock market performance, introducing new vulnerabilities to the economy. The banking and financial services sector (<keyword id="19910880" type="General" weightage="20" keywordseo="bfsi" source="keywords">BFSI</keyword>) has emerged as a key driver of market earnings, recording a 12 % increase in profit after tax (PAT) growth, significantly outpacing the 4.6 % growth observed in non-BFSI Nifty 50 companies. This disparity underscores the sector's importance in India's economic story and highlights promising investment opportunities.

India's strong economic recovery is led by fiscal expenditure: DSP MF

The <keyword id="20449324" type="General" weightage="20" keywordseo="Finance-Bill" source="keywords">Finance Bill</keyword> 2024 was passed by <keyword id="19895394" type="General" weightage="20" keywordseo="Lok-Sabha" source="keywords" meta.keywordsubtype="org" meta.entityname="Lok Sabha" meta.hostid="261" meta.entityid="Lok Sabha">Lok Sabha</keyword> on Wednesday evening, with a few amendments moved by the government. Replying to the debate, Finance Minister Nirmala Sitharman said the approach of the government has been to bring greater simplification of <keyword id="19987671" type="General" weightage="20" keywordseo="tax" source="keywords">tax</keyword> laws and procedures and enable growth and employment in the country. She responded to points made by members. The Finance Minister clarified that in real estate, the roll over provisions have not been withdrawn and are applicable. She said if the capital gain in a property transaction is invested in buying another one or two properties up to a maximum value of Rs 10 crore, no capital gain tax is required to be paid on such profits. <keyword id="20619608" type="General" weightage="20" keywordseo="capital-gains" source="keywords">Capital gains</keyword> can also still be invested in bonds which are notified under Section 54 of the Income Tax Act up to a maximum of Rs 50 lakh annually and save on taxes. To give relief on budget proposals, Sitharaman also moved an amendment in the Finance Bill on the changes in the capital gains tax on <keyword id="20412285" type="General" weightage="20" keywordseo="property-transactions" source="keywords">property transactions</keyword>. The amendment implies that taxpayers can avail either a lower tax of 12.5% without indexation or a rate of 20% with indexation, if the property is acquired prior to July 23, 2024, the day union budget was presented in the Lok Sabha. Sitharaman clarified that taxpayers can compute taxes under both provisions and choose to pay tax under the scheme where lower tax is applied. Effectively, July 23, 2024, is now set as the cut-off date for the calculation of the capital gains versus the earlier cut-off of 2001. Sitharaman said she has proposed these amendments as some members have raised hypothetical calculation to prove that under new provisions taxpayers will have to pay higher taxes. The new tax proposals on capital gains tax was brought in to bring in parity among different asset classes like equities, mutual funds and real estate. In the Finance Bill introduced on July 23, the Finance Minister had proposed a flat long term capital gains tax of 12.5% with no <keyword id="943856" type="General" weightage="100" keywordseo="indexation-benefit" source="Orion">indexation benefit</keyword>s, prior to it property transactions used to be taxed at 20% with indexation benefit. The minister also clarified that the grandfathering proposal will be allowed only for individual and Hindu Undivided Family (HUF) taxpayers and not for companies and Non Resident Individuals. They have to pay flat 12.5% LTCG tax without indexation. The proposed amendment will apply not only on real estate transactions, but also on unlisted equity transactions, which are done before July 23, 2024. All such transactions will be taxed at 10% long term capital gains instead of FY24-25 budget provision of 12.5% tax. With the opposition members demanding removal of <keyword id="19951327" type="General" weightage="20" keywordseo="GST" source="keywords">GST</keyword> on health insurance, Sitharaman said tax was there on medical insurance even before GST was introduced. "There was already a Service Tax on medical insurance, before the GST was introduced. This is not a new tax, it was already there in all the states. Those protesting here, did they discuss regarding the removal of this tax in their states? Did they write to the Finance Ministers of their respective states about it and asked them to raise it in the GST Council where states have 2/3rd part? No, but they are protesting here. This is their double standards, this is their drama," she said. "Wrongful protests have happened recently, and comments have been passed on the basis of a news report which suggested that the 'Centre has pocketed Rs. 24,529 crores of health insurance premiums alone'. This is incorrect and highly misleading. The GST rate of 18% on health insurance comprises of 9% CGST and 9% SGST. Thus, of the total collections of Rs 24,529 crores from health insurance in the last 3 years, Half of it, Rs. 12,264 crores, went straight to the states as SGST. It doesn't even come to the Centre," she added. The minister said that apart from this, roughly 41%of the Centre's share of GST collection on health insurance is devolved back to the states again, as part of Tax Devolution as per the Finance Commission's formula. Sitharaman said the new income tax regime is simpler and offers lower income tax rates for individuals. "It gives flexibility to the taxpayer to see where he wants to put his money in the absence of exemptions which is available in the old income tax regime. The old regime has not been dissolved and is still an alternative to the new tax regime. It still offers benefits of various deductions such as interest on home loan, etc. Individuals without business income can choose between regimes once and can revert back too. Hence, a choice has been provided to assesse," she said. For the previous Assessment Year 2023-24 till December 31, 2023, about 3.8% of taxpayers opted for the new tax regime, which equates to 30.93 lakh individuals, from a total of 7.98 crore ITRs filed in the categories of ITR-1 to ITR-4, she said. "However, for the Assessment Year 2024-25 until July 31, 2024, there was a dramatic increase in adoption of the new regime, with approximately 72.8% of taxpayers choosing the new tax regime. This represents about 5.25 crore individuals, out of a total of 7.22 crore ITRs filed in the same category." Sitharaman said this shows a substantial shift in taxpayer preference towards the new tax regime, over the span of just one year. "Taxpayers opting for the new regime does not mean savings and investments are not happening in the economy by the middle-class. Due to growth in fintech, better awareness, and ease of investment due to UPI, e-KYC, progressive regulations, investments in mutual funds have increased tremendously. On an average, 17.88 lakh new folios have been added every month in the last 5 years since June 2019. The number of unique mutual fund investors has grown from under 1 crore in 2014 to about 4 crore today," she added. The Finance (No.2) Bill, 2024 was passed after amendments moved by opposition were negatived. Sitharaman said the vision of Prime Minister Narendra Modi has been to establish a simple, efficient and fair technology-driven taxation regime in the country. "So, simplification and ease of compliance for the taxpayer has been the primary objective. In the last 10 years, and this year, in the third term of PM Modi, the approach to taxation has been to simplify it, reduce the burden on taxpayer and make sure it is transparent and equitable," she said. "This year also, our approach has been that we bring in greater simplification of tax laws and procedures, and that we enable growth and employment in this country," she added. Sitharaman presented the Union Budget in Parliament on July 23. This is the first full budget of the NDA government led by PM Modi. The BJP-led alliance won a third successive term earlier this year. The Lok Sabha took up discussion on the Finance Bill after the Appropriation Bill for the central government's expenditure for 2024-25 was passed by the House on Monday. The Finance Bill will now be discussed by Rajya Sabha. The passage of bill will complete the budget process.

Lok Sabha passes Finance Bill, provision on LTCG tax on property transactions amended

The government has officially announced October 1, 2024, as the starting date for <keyword id="23245808" type="General" weightage="100" keywordseo="Vivad-Se-Vishwas-2-0" source="keywords">Vivad Se Vishwas 2.0</keyword>, the direct tax dispute resolution scheme. If you're involved in a tax dispute, this scheme might be your chance to resolve it efficiently. Originally introduced during the 2024-25 Union Budget, the scheme is designed to handle <keyword id="22518437" type="General" weightage="20" keywordseo="income-tax-disputes" source="keywords">income tax disputes</keyword> that are currently tied up in appeals. Confirming the news, the <keyword id="19900485" type="General" weightage="20" keywordseo="Finance-Ministry" source="keywords" meta.keywordsubtype="org" meta.entityname="Finance Ministry" meta.hostid="261" meta.entityid="Finance Ministry">finance ministry</keyword> said in its notification: "The central government hereby appoints the 1st day of October, 2024 as the date on which the Direct Tax Vivad Se Vishwas Scheme, 2024 shall come into force." <h2>The scope of the disputes</h2>To give you an idea of the scale, about 2.7 crore direct tax demands are currently being contested, amounting to a staggering Rs 35 lakh crore. These disputes are scattered across various legal forums, and Vivad Se Vishwas 2.0 aims to help clear this backlog. <div type="Article" hostid="261" msid="113444994" title="In the long run, rate cut by Fed will be favourable for most US banks: Moody&amp;#39;s" mstype="2" mssubtype="0"></div>In her Budget speech, <keyword id="19912360" type="General" weightage="20" keywordseo="Finance-Minister-Nirmala-Sitharaman" source="keywords">Finance Minister Nirmala Sitharaman</keyword> highlighted the government’s dedication to simplifying taxes and minimising litigation. She said, "The government will continue its efforts to simplify taxes, improve <keyword id="20404572" type="General" weightage="20" keywordseo="taxpayer-services" source="keywords">taxpayer services</keyword>, provide tax certainty and reduce litigation while enhancing revenues." <h2>Who can avail the scheme?</h2>If you have any pending disputes or appeals, including writs and special leave petitions, whether filed by you or the tax authorities, as of July 22, 2024, you are eligible to take advantage of this scheme. The list of eligible cases includes those pending before the Supreme Court, high courts, Income Tax Appellate Tribunal, and Commissioner/Joint Commissioner (Appeals). It also covers cases before the Dispute Resolution Panel (DRP) and revision petitions awaiting a decision from the Commissioner of Income Tax. <div type="Article" hostid="261" msid="113417255" title="Individuals earning over Rs 10 cr rise by 63% in India; financial assets of high net worth individuals to nearly double by 2028" mstype="2" mssubtype="0"></div>However, the window to decide whether or not to participate in the scheme is limited. As Karishma R. Phatarphekar, Partner at <keyword id="20006170" type="General" weightage="20" keywordseo="Deloitte-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Deloitte India" meta.hostid="261" meta.entityid="Deloitte India">Deloitte India</keyword>, said: "Given the limited time window, an informed decision on opting for the scheme should be made promptly." The rules and forms for the scheme are expected to be published "imminently in the coming week." <h2>Success of the original Vivad Se Vishwas</h2>For those who are wondering about the potential impact, the first Vivad Se Vishwas scheme, introduced in 2020, resolved a significant number of cases. More than 1 lakh taxpayers participated, and the government collected about Rs 75,000 crore in taxes. With this track record, the expectations from Vivad Se Vishwas 2.0 are high. With October 1 just around the corner, now is the time to prepare if you are considering resolving your tax dispute through Vivad Se Vishwas 2.0. As the rules and forms are expected shortly, it’s wise to consult your <keyword id="23245810" type="General" weightage="20" keywordseo="tax-advisor" source="keywords">tax advisor</keyword> and make a decision soon. This scheme could provide the relief you’ve been waiting for while contributing to a more efficient tax system for all. (With inputs from PTI)

New Vivad Se Vishwas 2.0 tax resolution scheme to start on Oct 1 — what you need to know

<div type="image" title="For the unversed, trading in futures and options can be akin to setting their hard-earned money on fire" height="900" width="1200" msid="114064202" hostid="261" caption="&amp;lt;p&amp;gt;For the unversed, trading in futures and options can be akin to setting their hard-earned money on fire&amp;lt;/p&amp;gt;"></div> Once upon a time, there thrived a wild, wild land. Here, it was all about super high monetary stakes, lightning-fast trade deals, and bucketloads of money shifting hands every single second. This wilderness lured millions of individuals with the promise of super duper high returns. But, at what cost? Welcome to the unforgiving, ultra-risky wild west of <keyword id="19991165" type="General" weightage="20" keywordseo="Indian-equity-markets" source="keywords">Indian equity markets</keyword> called the <keyword id="145718" type="General" weightage="100" keywordseo="Futures-and-Options" source="Orion">futures and options</keyword>. Here, everyone seems to just fly right through the bright red-flagged warnings of financial risks to earn even a fraction of these promised returns. Most burn themselves in the process, but carry on nevertheless, as if nothing ever happened. <h2>Chasing the cloudy profits</h2>The data conclusively proves that every 9 out of 10 individuals only lost their hard-earned money in this land. But hey, what do the numbers know? Some hide their losses out of shame, some out of fear. The proponents, meanwhile, proudly boast unusually high returns on their investments, some open social media channels while others encourage their friends and family to take the plunge. Naturally, news of this unstoppable and humongous en-masse migration to the F&amp;O (futures and options) town has reached sheriff <keyword id="19901201" type="General" weightage="20" keywordseo="SEBI" source="keywords" meta.keywordsubtype="org" meta.entityname="SEBI" meta.hostid="261" meta.entityid="SEBI">SEBI</keyword>, galvanising them into action. After all, it was time to put a leash on this madness and save the common man. The inhabitants of this town doubled in the last 2 years, from 51 lakh in FY22 to 96 lakh in FY24—99.8% of whom were small and mid-income traders. But profits? Well, that's a different, rather completely absent story. <h2>Que Sera Sera, much?</h2>A recent report by SEBI (Securities and Exchange Board of India) that studied profits and losses made by traders in the equity derivatives segment between FY22-24 exposed the mad mania of futures and options trading in India, especially since the pandemic. Per the report, 91.1% of individual traders, or about 73 lakh traders had only lost money trading in futures and options in FY24. Between FY 22-24, over 1 crore traders, or about 92.8% of individual traders, had lost Rs 2 lakh each. But once bitten, twice shy? Well, not in this case. More than 75% of individuals, who had only made losses trading in F&amp;O in FY22 and FY23, continued to trade vigorously in FY24 as well, without any changes in the bottom line, which remained deep in red and negative. So, then all these traders must be uber-rich, with tons of cash and not much care to spare? Nope. 76% of traders in the F&amp;O space in FY24 had an annual income of less than Rs 5 lakh. 2 years ago, their share stood at 71%. And their choice of poison? Options! In FY24, 60% of traders made losses trading in futures, but a whopping 91.5% burnt their funds trading in options. Mind you, futures are riskier than options. With futures, which require significant capital investment, the buyer and seller both are contractually bound to adhere to the pre-determined strike price of the futures or options contract, irrespective of whether the prevailing prices are higher or lower (and thus, resulting in losses for either the buyer or seller). With options, since this adherence ain't necessary, individuals end up taking debt to take highly leveraged positions while trading here. <h2>Scale of the explosion</h2>Anyone who trades even infrequently will tell you that a demat account is the mitochondria or powerhouse of the trading cell. As of August 2024, India had over 17.1 crore <keyword id="20957284" type="General" weightage="20" keywordseo="demat-accounts" source="keywords">demat accounts</keyword>, which are a prerequisite for trading in the markets. India is the 9th biggest country in the world, in terms of total demat accounts. Did you know that our demat accounts are at par with the entire population of Bangladesh? Talk about scale! Just 4 years ago, in March 2020, this number was a mere 4 crore. Naturally, the total F&amp;O turnover on both <keyword id="20004725" type="General" weightage="20" keywordseo="NSE" source="keywords" meta.keywordsubtype="org" meta.entityname="NSE" meta.hostid="261" meta.entityid="NSE">NSE</keyword> and BSE has hit the roof, and also broken it. As of October 4, 2024, the total futures and options turnover on NSE stood at a massive Rs 4,78,27,27,750.30 crore. Good luck counting the thousands! <table style="border-width: initial; border-style: none;" class="redcator-table-advance"></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;">Year </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;">Total Turnover (Both Futures and Options) (In Rs Crore) </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;">2020-21 </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;">64,36,03,951.51 </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;">2021-22 </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;">1,69,52,33,134.47 </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;">2022-23 </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;">3,82,23,26,468.06 </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;">2023-24 </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;">7,99,27,67,152.43 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Source : NSE Another metric that underlines the meteoric growth of trading in India is the collection of STT or <keyword id="20930760" type="General" weightage="20" keywordseo="Securities-Transaction-Tax" source="keywords">Securities Transaction Tax</keyword>. As of September 2024, India's STT mop-up had gone past Rs 26,000 crore. Traders have to pay STT whenever they buy or sell any security in the market. So, more trading brings in more STT, and hence, more revenue for the government, so they're not really complaining. After all, this is certainly what they'd call enviable growth. As of August 2023, our STT collection stood at about Rs 21,599 crores. And in FY20-21, India's STT collection had been Rs 16,000 crore. If only our salaries also managed to grow at this rate! <h2>So, what's happening?</h2>Two things. One, it's the big bulls who are raking in all the moolah. And it's the younger lot (those aged under 30) who are propping them up for this. In FY24, 43% of individual traders in the market were less than 30 years of age. In just one year, this number has swelled by 12 percentage points from just 31% of individual traders. But who says ageing is bad? Wrinkles and silver hair seemingly have a propensity of incurring lesser losses in the market. In FY24, only 79% of traders aged above 60 years made losses, as compared to 93% of those aged below 30. Small and mid-income traders, which make up 98% of the total trader base, witnessed average losses per person of Rs 65,000 and Rs 1.5 lakh in FY24 in futures and options, respectively. The winner here? Clearly, the big bulls, who declared an annual income of over Rs 1 crore, ended up with average profits of Rs 96,000 per person this year. <h2>What’s the sheriff up to?</h2>The government has finally swung into action, hiking the STT rate for F&amp;O during this year’s budget. Effective October 1, 2024, the STT on futures stands at 0.02%, up from 0.0125%. For options, it was upped to 0.1% versus 0.0625% previously. Small margins, but huge impact oncoming. Says Puneet Sharma- CEO and Fund Manager at Whitespace Alpha, “SEBI aims to enhance market stability while safeguarding investor interests, reflecting the regulator's intent to balance risk management with market participation”. But this might come with its own share of challenges, too. “Stricter norms around leverage, transparency, and capital adequacy could limit the ability of investors to determine their own risk appetite, thereby stifling innovation in trading strategies. Over-regulation in an environment that thrives on strategic flexibility and creativity could dampen the market’s dynamism, affecting India's competitiveness in the global derivatives landscape”, he observes. SEBI recently came out with a set of guidelines that aim to thwart <keyword id="19972907" type="General" weightage="20" keywordseo="retail-investors" source="keywords">retail investors</keyword>' participation in futures and options and hinder them from taking undue risks. Here's a quick recap of what's to come for the residents of the F&amp;O town Margin Requirements: To battle the high volatility and chaos which is generally seen on expiry days(i.e the last mandated date, post which an option becomes invalid), SEBI will put in place an extreme loss margin (ELM) of 2% for all open short options on the day of expiry. Translation? Traders will need to pony up more cash upfront, leaving them with fewer funds to take on risky bets. It ain't a choice: No more of one expiry every single day! Going ahead, an exchange like BSE or NSE will just be able to offer weekly expiries, that too, only on one benchmark index, as opposed to an entire buffet it currently offers. At present, NSE offers weekly options contracts for its financial index, bank and midcap indices. But say goodbye to this, and hello to derivatives on only 1 index per exchange. Raising the bar: Effective November 30, 2024, the minimum contract value for index derivatives will be upped to Rs 15 lakh, from the present Rs 5-10 lakh. The hope is that by making it ultra-expensive to enter these trades, investors will be dissuaded from taking on risky trades. Pay upfront: Starting February 2025, those trading in options will have to pay the entire options premium upfront, even before their trades are executed. This is because options generally carry very high leverage, and paying a significant sum upfront can force traders to think twice. Invigilation Pro Max: Starting April 1 2025, to make sure that the number of positions for equity index derivatives does not slyly slip over the mandated limit, especially on expiry days when trade volumes are huge, the exchanges will have to take a minimum of 4 position snapshots randomly. The question is, will these injections of sobriety be enough to calm down the steroid-fed bull of the futures and options market in India? Well, only time and market turnover will tell! For more insights into the financial markets and business news, stay tuned to our site and social media handles. And don’t forget to subscribe to Business Insider India’s newsletters for your weekly dose of Simply Put! Disclaimer: The content on this website is for informational purposes only and should not be construed as investment advice. We recommend readers consult certified, qualified and registered advisors for professional and personalised financial advice.

SIMPLY PUT: SEBI is on a mission to take on the wild, wild west of futures and options in India. Here’s why, what, and how

Deciding whether to rent or buy a home is one of the biggest financial choices most people will make. It’s not a straightforward decision, especially when considering the rapid increase in <keyword id="21530105" type="General" weightage="20" keywordseo="rental-prices" source="keywords">rental prices</keyword> in some of India’s biggest cities. Let’s dive into how the cost of renting has risen compared to buying, and whether it's still worth it to rent or if it’s time to start looking at <keyword id="20879400" type="General" weightage="20" keywordseo="homeownership" source="keywords">homeownership</keyword>. <h2>Soaring renting costs</h2>If you’re renting in cities like Bengaluru, Pune, or Kolkata, you might have noticed something frustrating — your rent seems to keep going up. According to <keyword id="20974307" type="General" weightage="20" keywordseo="ANAROCK-Research" source="keywords" meta.keywordsubtype="org" meta.entityname="ANAROCK Research" meta.hostid="261" meta.entityid="ANAROCK Research">ANAROCK Research</keyword>, in several of India’s top cities, rental prices have jumped significantly, even more than <keyword id="21006188" type="General" weightage="20" keywordseo="property-values" source="keywords">property values</keyword> in some places. For example, in Bengaluru’s Sarjapur Road, average monthly rents shot up by 67% between the end of 2021 and the middle of 2024. If you were paying Rs 21,000 in rent at the end of 2021, that would now be around Rs 35,000 a month! And Bengaluru isn’t the only city where renters are feeling the squeeze. In Pune’s Hinjewadi, rent prices have surged by 52%, while property values went up by just 31%. Similarly, in Kolkata’s EM Bypass, rents rose by 46%, but property prices saw a much smaller bump of 15%. But there are cities where buying makes even more sense because property prices are outpacing rental costs. In Hyderabad’s Gachibowli, for instance, while rent went up by 50%, property values soared by 70%. This trend is also seen in NCR’s Sohna Road, where rents increased by 40%, but property prices grew by 54%. <h2>Is renting really worth it?</h2>Let’s say you’re living in a 2BHK flat in Bengaluru, paying Rs 50,000 a month in rent. It might seem like an okay deal at first, but when you look at the long-term cost, things get tricky. Dr Prashant Thakur, Regional Director &amp; Head of Research at ANAROCK, breaks it down: "One-year payable rent for the individual is Rs 50,000 x 12 = Rs 6,00,000. For the next 10 years, the total rental outgo, including an annual rental increase of 7%, will be around Rs 83 lakh. This rental outgo is almost 69% of the total cost of this property — and this is just an expense with no investment value accrued." <div type="Article" hostid="261" msid="113367496" title="I bought my dream home, but the difficult process and higher cost sometimes make me wish I&amp;#39;d stuck with renting" mstype="2" mssubtype="0"></div>What does that mean? If you keep renting, you’re essentially throwing money out the window without gaining any ownership of the home. While you may have the flexibility that comes with renting, your hard-earned money doesn’t build any long-term value. <h2>Is it time to make the home purchase leap?</h2>So, what if you took the plunge and bought the place instead? Let’s say you’re eyeing a Rs 1.2 crore apartment and can afford to put down a 20% down payment, with the rest coming from a 10-year home loan at 9.5% interest. Dr. Thakur explains, “If the individual opts to buy the property via a home loan, has the financial wherewithal to make a 20% down payment, and borrows the remaining amount over a 10-year tenure at 9.5% interest rate, such a purchase is definitely profitable. Instead of spending a huge amount on rent, the individual can pay monthly EMIs and ultimately own the physical asset after a ten-year period.” With this approach, the monthly EMIs may be slightly higher than what you’re paying in rent, but there’s a key difference — you’re working towards owning your home. After 10 years, the home is yours, and you don’t have to worry about rent going up year after year. <h2>Homeownership isn’t just about the numbers</h2>While the math might lean towards buying, it’s not just about finances. For some people, renting makes more sense, especially if they don’t plan to settle down in one place for a long time. Job mobility, financial stability, and lifestyle choices all factor into this decision. However, something interesting happened during the COVID-19 pandemic. Many people, including millennials who had previously been all about renting, started reconsidering. The pandemic brought a sense of uncertainty, and suddenly, the security of owning a home became much more attractive. Dr. Thakur points out, "Amid a rising aversion to high-risk investments, an increasing number of tenants see rent as an expense, and EMIs as SIPs towards a non-volatile asset." <div type="Article" hostid="261" msid="113395713" title="Welcome to interest-rate cut week: Here&amp;#39;s how the Fed&amp;#39;s next move will impact everything from home prices to new cars loans" mstype="2" mssubtype="0"></div>Plus, home loan interest rates are currently lower, averaging between 8.75% and 9.5%, making homeownership more affordable than it has been in the past few years. And let’s not forget the tax benefits: Homebuyers can avail of deduction on principal repayment, interest charges, and a further deduction of Rs 50,000 for first-home buyers. The answer, as with most things, isn’t black and white. Renting offers flexibility, especially if your job might take you to a new city in a year or two. But with rents rising sharply in cities like Bengaluru, Pune, and Chennai, buying might be a smarter option in the long run. If you’re financially ready to make a down payment and secure a home loan, investing in a home could save you from steep rental hikes and give you the stability of owning a property.

Should you rent or buy a home? Here’s how much rental pricing has gone up compared to ownership cost in major Indian cities

Over the past few months, there’s been a lot of brouhaha about the lagging pace of bank deposits in India. Simply put, the rate at which Indians are depositing their hard-earned money in banks has been falling constantly, and some blame the increasing financialization of household savings in the country, or the rising preference of Indians towards mutual funds and shares. So, the hypothesis is that people are choosing to invest more in mutual funds and the Indian equity markets through direct investments, IPOs, or NFOs, the money flowing into Indian banks in the form of deposits is slowing down. But is that really the case? <h2>A crisis or a phase?</h2><keyword id="19899808" type="General" weightage="20" keywordseo="rbi" source="keywords">RBI</keyword> data suggested that for the quarter ended June 2024, bank deposits grew at 11.7%. On the other hand, credit growth has outpaced this at 15%. This means that the outflow from banks as loans is far greater than the inflow into them in the form of deposits in Q1 of FY 2024-25. The situation largely saw cut-copy-paste in the first week of September as well, with loans registering a 13.3% YoY growth during the period, while deposits rose only 11.1%. This gap has only been widening for the last 3 years. Since deposits are how banks gather assets to further lend and earn interest income as a consequence, even a slight dip could set the alarm bells ringing for banks, and rightfully so. And truth be told, mutual funds are indeed taking on bank deposits in a big way. Per a report by <keyword id="20250971" type="General" weightage="20" keywordseo="franklin-templeton" source="keywords">Franklin Templeton</keyword>, in August 2024, the AUM (assets under management) of Indian mutual funds, or the total funds managed by them, stood at 31.3% of total bank deposits in the country, up from 24.20% during the year-ago period. As of August 2024, the AUM of mutual funds stood at Rs 66.17 lakh crore, an all-time high. But all said and done, is this really the reason why the rate of bank deposits is falling behind? SBI has dismissed this to be a “statistical myth”, and experts point out that since equity and fund houses also keep the cash in their respective bank accounts, there’s no cause for concern. So, is financialization really to be blamed for the trailing tempo of deposits? Or is something else happening behind the scenes? We take a closer look: <h2>First, are <keyword id="4000333" type="General" weightage="100" keywordseo="household-deposits" source="Orion">household deposits</keyword> really slowing down? And is that a cause of concern?</h2>Data from Motilal Oswal suggests the contrary. Deposits grew by around 10.4% between March 2020 and August 2024. Data from RBI also highlights that as of August 9, 2024, bank deposits witnessed a YoY growth of 10.8%. The loan-to-deposit ratio for the retail segment, which indicates what percentage of its total deposits the banks lend out as loans, has stayed at 77.5%, above the 77% mark for the tenth straight month. Also, we can’t forego the fact that the share of Indian <keyword id="20319599" type="General" weightage="20" keywordseo="households" source="keywords">households</keyword> in bank deposits has indeed slowed down. However, data from Axis AMC shows that the dip is marginal—from 63% in 2022 to 62% in 2023 and 61% in 2024. What has slowed down even more considerably is the share of government deposits in the aggregate bank deposits, which has dipped from 14% in 2018 to 9% in 2024. So, it's not just household deposits, you see. Moreover, as of March 2024, the collective CASA ratio (current and savings account deposits) of all commercial banks in India stood at 41.00%, down from 43.1% in March 2023 and 45.2% in March 2022, marking a nearly 5% point decline over the past year, while still staying over the 10-year average of 39.2%. This implies that Indian banks are relying more on higher-cost funds (savings accounts), which can limit their profitability. <h2>What is this financialisation of savings we are talking about?</h2>Then again, there is no doubt about the growing affinity of Indians towards mutual funds and stock markets. Recent data from CBDT (<keyword id="19942037" type="General" weightage="20" keywordseo="central-board-of-direct-taxes" source="keywords">Central Board of Direct Taxes</keyword>) highlights that India’s net direct tax collection surged by around 22%, driven exclusively by the significant uptick in the collection of <keyword id="20930760" type="General" weightage="20" keywordseo="securities-transaction-tax" source="keywords">Securities Transaction Tax</keyword> (STT), which doubled to Rs 26,154 crore, from Rs 13,352 crore in the year-ago period. Why does this matter? STT is levied when you buy or sell equity shares on stock exchanges, sell equity mutual funds, and trade in futures and options in the equity segment. Such taxes, including the multiple other taxes in equity market investments, are considered as leakages as the money moves out of the economy into government coffers. Data from a ValueQuest report explains that over the last 20 years, the markets have handsomely rewarded the investors, generating over $900 billion in incremental value for them. This is the major driver behind the dramatic rise in investment flowing towards the equity markets. There’s further proof of this budding romance, if you check the demat pudding. The number of demat accounts, which are a primary requisite for participating in the stock markets, also burgeoned by 42.3 lakh in August 2024, taking India’s total tally of demat accounts beyond 17 crore. To put this in perspective, this is almost equivalent to the population of just 8 nations in the world, including China, the US, Brazil and more. Vivek Iyer, Partner, Grant Thornton Bharat thinks it's rather important, as well. “Financialisation of household savings in India is an indication of deepening capital markets in the market, especially from a retail investor standpoint. Bank deposits with a modest rate of return are no longer the only option for savings for investors. Investors today have more avenues for wealth creation in the form of public capital markets, which have democratized wealth creation and provided equality of opportunity to retail investors”, he says. Yes, Indians are investing more and more in the markets, and in mutual funds. But is it a sin to look out for inflation-beating returns, which the stock markets offer, and vanilla bank deposits don't? After all, the allure of 12-13% annual returns offered by equities can certainly pale the stability offered by good old deposits, which generally do not go beyond 9% when it comes to annual returns. But all of this is not what is behind the slowdown. India is still a toddler in the school of savings financialization, with less than 10% of the population holding a demat account, and less than 5% of us saving in equities. That's a drop in the ocean of deposits, far inadequate to trigger a tsunami. <h2>Tell me why lagging deposits have nothing to do with Indians investing more in mutual funds!</h2>Says Shweta Rajani, Head - Mutual Funds, Anand Rathi Wealth Limited, “Households' equity holdings composition grew from 11.1% in FY 23 to 14.7% in FY 24. This trend reflects a growing awareness of investment options, empowering individuals to take control of their financial futures. Despite this transition towards equities, banks still hold a significant share of household financial savings—33.5% in FY24 compared to 34.9% in FY23”. Also, household savings and their subsequent financialization do not have much to do with deposit creation, which is entirely made by banks. What actually drives increased deposits is credit growth or increased lending. When interest rates are eased, people tend to borrow more and spend more, which circulates more money in the economy. For the past 4 years, RBI has been tightening the screws on interest rates, which raises the cost of borrowings, and makes it more expensive to take loans, putting a dampener on credit growth, but effectively curbing inflationary pressures. The last time RBI cut the repo rate by 40 basis points was back in May 2020, 4 years ago. The lag in deposit growth we’re witnessing is almost 3 years old. Coincidence much, or just good old economics at work? But with the <keyword id="19900043" type="General" weightage="20" keywordseo="fed" source="keywords">Fed</keyword> recently setting a rate cut precedent by slashing 50 bps off its interest rate, RBI is expected to follow suit in the next <keyword id="19918491" type="General" weightage="20" keywordseo="mpc" source="keywords">MPC</keyword> (Monetary Policy Committee) meeting, scheduled for November 2024. A rate cut would ease the aforementioned high cost of borrowing, and increase loan-taking for corporates and institutional investors, thereby stoking consumption in the economy. And then, deposit creation in banks is likely to return to its former glory. If not, then that would be a curious case to unravel! But that worry is for another day.

A Deposit Dilemma — What's the fuss about a crisis in Indian bank deposits? Are mutual fund investments to blame?

<ul class="summary-list"><li>Uber-rich business owners in high-tax states can save on income taxes without moving.</li><li>Instead of selling their businesses outright, they put their stock in a trust in a tax-haven state.</li></ul>Top earners continue to flock to states with little to no income tax such as <a target="_blank" href="https://www.businessinsider.com/where-rich-people-are-moving-florida-texas-tennessee-north-carolina-2024-1#:~:text=Wealthy%20people%20are%20moving%20to,even%20for%20the%20highest%20earners.">Florida and Texas</a>. It's an especially smart move if you're about to sell a business. As for rich entrepreneurs who aren't ready to make a move, they can still save on taxes with the right lawyer.By creating a special kind of trust, business owners can take advantage of the loose tax laws of other states. Instead of selling a business outright, they transfer their shares to an incomplete non-grantor trust set up in a <a target="_blank" href="https://www.businessinsider.com/us-states-tax-haven-billions-hidden-untaxed-wealth-assets-2022-9">tax-haven state</a> such as Nevada. When the shares are sold, the trust collects the proceeds without paying any state income or capital-gains taxes. The trust assets grow free of those taxes and are shielded from creditors.Dan Griffith of Huntington Bank expects ING trusts will surge in popularity with dealmaking on the rebound coinciding with a "silver tsunami.""You've got baby-boomer business owners who need to transition, and you also have a ton of capital on the sidelines looking for transactions," Griffith, Huntington's director of wealth strategy, said. "With more deals comes more need for tax-saving strategies."Investors can also benefit from putting their portfolios in ING trusts because that allows the dividends to grow free of state taxes. ING trusts are powerful tax-avoidance tools, so much so that New York and California have enacted laws to render them useless for state residents. California closed the loophole in 2023, estimating it would increase tax revenue by $30 million that year and $17 million each following year.Each state also has its own provisions to navigate, which makes setting up INGs cumbersome. However, Bank of America's Timothy Herbst said it could still be worth it in states without sky-high income-tax rates."That trust can grow conceivably without any state income tax," the wealth-strategy executive said. "That's a significant savings even in a state like North Carolina at 4.5%. It's not necessarily a huge income tax, but you look at a very large portfolio growing over decades, that can be real significant savings."<h2 id="a0857d85-806e-4e72-a9da-646cab9ef538">Here is how ING trusts work</h2>ING trusts come in different flavors. Nevada and Delaware are popular states for domiciling ING trusts, where they're referred to as "NINGs" and "DINGs," respectively. However, Wyoming and South Dakota are also options as they do not tax trust income or capital gains and protect trust assets from creditors.The person who creates the trust, otherwise known as the settlor, does not have to reside in that state, but the trust should be administered by a third party who does.Here's an example of how an ING trust can work.ING trusts are still subject to federal capital gains taxes, but the ultrawealthy users of INGs would likely be subject to that burden anyway. For a centimillionaire, it's not hard to reach the top rate of 37%, which applies to incomes above $578,126."These are superrich people," Bob Lord, a senior advisor on tax policy for the <a target="_blank" href="https://www.businessinsider.com/patriotic-millionaires-want-wealth-tax-congress-reconciliation-build-back-better-2022-7">Patriotic Millionaires</a>, said. "They're still taking in enough to get to the 37% bracket."Furthermore, INGs can be used to take advantage of a <a target="_blank" href="https://www.businessinsider.com/qsbs-qualified-small-business-stock-startups-criteria-taxes-2019-12">tax perk</a> for early shareholders that exempts at least $10 million in profits from the federal capital-gains tax. Steve Oshins, a Nevada lawyer, said founders could double their exemption by setting up an ING trust."This trust can serve as a second taxpayer so that the individual can get a second $10 million exemption," he said. "This can apply even if they don't live in a state with a state income tax."For the ING trust to pass muster with state authorities, there should be multiple beneficiaries in addition to the settlor and their spouse. Since beneficiaries do have to pay state income taxes — if applicable — when they receive distributions. For this reason, lawyers advise that clients take as few distributions as possible and let the assets grow in the trust for their children or future generations."It is usually better that the client knows that distributions won't be coming back to him or her or to their spouse," Herbst said. "If they did need those distributions, then it probably is not going to be the right strategy."That said, sometimes taking a distribution makes sense if there is financial need or the client has moved to a low-tax state since setting up the ING trust, Oshins said."You just have to look at each fact pattern on its own and make the right decision," he said.<h2 id="68a845c4-1176-4c9e-871e-cd1aab5eb265">Buyer beware</h2><ol><li>ING trusts can't be used to avoid state taxes on salaries or rental income.</li></ol>ING trusts cannot be used to defer income taxes on salaries or income from tangible assets in the state. That income, referred to as source income, is subject to state taxes.For instance, Griffith said, an Ohio resident cannot avoid state or local taxes on income from rental properties in the state even if they transfer ownership of the properties to an ING trust in South Dakota.For clients in states with aggressive tax authorities, Griffith recommends they step away from their business' day-to-day operations and collect a minimal salary before transferring their interests to the ING trust."What you really need to do is become essentially just a shareholder, be, as a business owner, somebody who says, 'I am just receiving dividends from this company. I own C-corp stock,'" he said. "In many states, that becomes non-source income."<ol start="2"><li>Setting up an ING trust is like threading a needle.</li></ol>These trusts have to be structured carefully to avoid <a target="_blank" href="https://www.businessinsider.com/real-estate-gift-tax-avoidance-trusts-wealth-planning-rich-inheritance-2023-5">triggering estate taxes of as much as 40%</a> while keeping the income-tax advantages. In addition to navigating the laws in the home state and the tax-haven state, the settlor has to retain certain rights and relinquish others. For instance, the settlor can't have the ability to compel distributions but should have the right to name beneficiaries at death."It's inherently complicated," Griffith said. "You've got to have a fairly sizable transaction to make the juice worth the squeeze."<ol start="3"><li>The trust has to be set up well before the business is sold.</li></ol>It is easier for a state tax authority to pursue income from the sale of a business if it is done shortly after the ING trust is established. Griffith recommends at least a year's delay, but it is the biggest challenge for clients, he said."They're like, 'Oh, I don't want to fund the trust until we know we're going to sell.'" he said. "You have to do it in advance. And if you do, those are the ones that I've seen that have been really successful."

This tactic to avoid income taxes without moving to Florida could surge thanks to a 'silver tsunami'

My grandparents' vacation cabin in Lake Tahoe is the stuff of legend.In the '90s, when my parents were just friends, my dad "accidentally" invited himself on a ski trip with my mom and her parents. It was an epic winter when the blizzards created berms as tall as the houses. By the time spring came, my parents were dating.My grandparents' little house in South Lake Tahoe, which they bought for $113,000 in 1984, quickly became a haven for my family.I dreamed of getting married there and taking my own kids to the cabin someday. But in May, my mom called to tell me this could be the last year we have the home.A tax on vacation home-owners might make our place in Tahoe too costly to keep.A measure on the ballot today proposes an annual tax on every property occupied less than 51% of the year. If it passes, second-home owners would owe $3,000 in 2026 and $6,000 every year after.In ski towns and cities across the US, home prices have skyrocketed, and young people struggle to pay rent or buy a house. Meanwhile, the wealthy have flocked to mountain retreats where they can vacation and work from home. One of the measure's architects told BI that it will combat this trend by incentivizing second-home owners to rent to local residents, bringing down the cost of housing by increasing the available supply.Supporters project city revenue gains of $4 million to $8 million in the first year and $10 to $20 million every year after that. The money would go toward rebuilding roads, creating more public transit, and paying the administrative costs of implementation.Framers of the Tahoe tax measure took inspiration from Berkeley, California, which adopted a vacancy tax this year. The Hawaiian island of Oahu and the Colorado ski towns of Aspen, Vail, and Breckenridge are also considering vacancy taxes.But some say it's unclear whether the tax will actually lower housing prices for locals.<div type="image" title="View of the mountains around South Lake Tahoe" height="3279" width="4896" msid="114990171" hostid="261" sizebytes="935262"></div>The opposition in South Lake Tahoe is made up of some of its institutionalized powers, including the local Chamber of Commerce, the South Tahoe Association of Realtors, and the restaurant and lodging associations. In interviews, they told BI that a tax would drive second-home owners away, depriving local businesses of their spending while having no impact on housing affordability for locals. The city's report on the economic outcomes of the tax said it may not actually incentivize homeowners to rent or sell to locals.Some long-timers feel squeezed: How do they afford to live in these places, and what measures would actually fix the problem? Is it a tax — or is it, say, zoning changes that allow more homes to be built?Similar battles over housing affordability are happening across the country. I just happen to have a front-row seat to this one.Since the city of South Lake Tahoe was incorporated in 1965, it's been populated by a healthy mix of year-round and seasonal residents.Middle- and upper-middle-class mountain enthusiasts from the Bay Area flocked to the city, which, with 21,000 residents per the most recent census data, is more densely populated than any other town around the lake.This part of Tahoe has long been a relatively more affordable alternative to the ski havens of Colorado and Utah. As of October 2024, the median sales price for homes in South Lake Tahoe was $750,000, according to Realtor.com. By comparison, it was $958,000 in Park City, Utah, $1.4 million in Aspen, and $1.6 million in Vail."It's one of these places where you have folks from really different socioeconomic backgrounds," said Amelia Richmond, who favors the tax and leads a group of other supporters called Locals For Affordable Housing. "It's one of the reasons I think mountain towns are so cool."But that environment doesn't exist without both year-round and seasonal residents in town. Fifty-six percent of Tahoe's 9,125 housing units are filled by renters, while 44% are owner-occupied, according to the US Census' American Community Survey.Because Measure N will appear on the local ballot, most second-home owners directly affected by the tax can't vote. Nearly half of the property-owning population — my family included — is left watching debates over the tax play out among local residents, who are split on where they stand.<h2 id="90a60f06-f278-4362-9ebf-345a4dac61c6">Locals are divided on the tax</h2>Steve Teshara, who has held several roles, including CEO, at the Tahoe Chamber of Commerce, said the tax would hurt the local economy by driving out second-home owners.He pointed to evidence from a previous measure, which banned Airbnbs and other short-term rentals in certain parts of town. That measure was also intended to stabilize area home prices and rents."It has an immediate effect when visitors are not able to spend as much money or when visitors just aren't here anymore," Teshara said.The previous measure effectively reduced the supply of Airbnbs from 3,350 units in January 2018 to 2,635 units in July 2024, according to the short-term rental data company AirDNA. However, it didn't make the expected dent in housing costs, data from the Realtors' Association shows. Median sale prices continued to increase overall, from $440,000 in 2018 to $750,000 in 2024.<div type="image" title="View of Highway 50 in South Lake Tahoe with a light dusting of snow" height="4153" width="5538" msid="114990167" hostid="261" sizebytes="1763634"></div>Teshara believes the housing crisis must be solved in the long term, pointing to the local government's <a target="_blank" class="" href="https://www.cityofslt.us/2332/Affordable-Housing-Properties-Other-Deve">affordable housing construction projects</a>. He is a fan of indirect measures currently in place, like vanpooling, which shuttles people who live further away — where prices are lower — through the mountains to work.Richmond, the pro-tax organizer, said that business from year-round residents is more important to many shops and restaurants than purchases from occasional visitors."How many beers do you have to buy to make up that difference when you're up just once a quarter?" she said. "Local economies are actually robust when you have a healthy middle class that can spend small amounts of money on a regular basis."<h2 id="139d1f43-575b-4368-9419-52d99a68446e">Taxing second home-owners may not make them rent to locals</h2>The city of South Lake Tahoe conducted an independent study on the tax's economic outcomes if it were to go into effect.The findings supported Richmond's assertion that the measure could modestly boost sales tax revenue if second homes vacated by owners were converted into permanent residences or long-term leases.But the report also cautioned that the measure's impact on housing availability will depend largely on how second-home owners react if the tax is adopted — behavior that's nearly impossible to predict.Second-home owners could sell their properties, like my family is considering. But because of current home prices, buyers would likely be people who don't see an additional $6,000-a-year expense as a deterrent. While the city could collect additional tax revenue from a wealthier population of second-home owners, that wouldn't make it any easier for locals to buy.Homeowners could also decide to rent and become landlords instead of selling, as Richmond hopes. But that may be a longer shot, the city report found.Based on the previous leasing programs in the area, "it appears that financial incentives are not particularly effective to motivate owners of vacant property in South Lake Tahoe to rent out their homes for longer terms," the report said.<div type="image" title="A view of South Lake Tahoe in 1974" height="3458" width="5142" msid="114990163" hostid="261" sizebytes="1062714"></div>Some second-home owners told Business Insider they would refuse to rent to tenants.Sherri Maslyar, who has owned a home in South Lake Tahoe with her husband since 2013 and visits monthly, said she heard a horror story about a neighbor's long-term tenant who defied the landlord's no-pets rule and ruined parts of the house. She said she would rather pay the tax than risk renting her home to someone untrustworthy."That's not what we bought the house for," she said.<h2 id="534b0195-f639-4a7b-8fb1-9c677eca426d">Tahoe's character — and prices — have changed over the years</h2>The median income in South Lake Tahoe grew 65% from $40,972 to $67,686 between 2000 and 2022, according to census data. In the same period, median home prices in the area ballooned by 288%, from $189,000 to $732,500.Zillow's rent data, which only goes back to 2020, shows that typical rents in South Lake Tahoe grew from $2,101.52 in October 2020 to $2,653.05 in October 2023. The typical rent as of September 30 was $2,682.50.The neighborhood where our family's cabin sits was once populated by eclectic A-frames and modest one-story structures, whose kitschy exteriors tended to match the eccentricities of their owners. Now, vaguely chic rustic McMansions with smooth angles and wood finishing are common.<div type="image" title="Line of wooden bears carrying &quot;howdy&quot; and &quot;welcome&quot; signs" height="3435" width="5617" msid="114990174" hostid="261" sizebytes="1760630"></div>Part of why building more houses or apartments — which might stabilize prices — has been so difficult is due to strict development laws. In Lake Tahoe, all development projects must be approved by the Tahoe Regional Planning Association (TRPA), whose primary objective is conservation, not housing construction.Jeff Cowen, TRPA's public information officer, told BI the agency's main goals were environmental, adding that "we have to consider community impacts of our regulations." It doesn't have a stance on the tax.One thing opponents and proponents of Measure N agree on: TRPA's mandate has made it difficult to build new housing in Tahoe to address the housing shortage. But they disagree on whether radical and rapid changes should be made to make Tahoe affordable right now.<h2 id="7b8ad7f8-c9b9-4a00-b5a4-14745b01c7cc">It might be the end of Tahoe as we know it</h2>A place that was once accessible as a seasonal destination for a middle-class family risks becoming a playground for the very rich if changes in the Tahoe market continue to make buying a home there relatively unaffordable.I am benefiting from generational wealth stemming from my grandparents' choices, and I will always be grateful for the investment they made.My family isn't sure what we'd do if the tax passes. One option is to rent to a long-term tenant, but we'd likely lose the freedom to come and go seasonally. Another is to sell the house.<div type="image" title="A middle-aged Asian American couple and their 10-year-old daughter standing in front of an old car in a ski resort parking lot." height="537" width="800" msid="114990172" hostid="261" sizebytes="23164"></div>Either way, we'd be saying goodbye to the home as we've known it for the past four decades.It's hard to imagine giving up my ties to a place that has such emotional value — that is very much the second home my grandparents intended it to be. And if the tax doesn't do what proponents hope it will, I'd be losing Lake Tahoe for nothing.All I can do now is wait and see.

My family bought a vacation home in Lake Tahoe for $113,000. A new tax could push us out. 

The government has relaxed provisions of <keyword id="19948097" type="General" weightage="20" keywordseo="tds" source="keywords">TDS</keyword>/<keyword id="19950203" type="General" weightage="20" keywordseo="tcs" source="keywords">TCS</keyword> in the event of the death of the deductee/collectee before the linkage of PAN and <keyword id="19898107" type="General" weightage="20" keywordseo="aadhaar" source="keywords">Aadhaar</keyword> card. TDS is Tax Deducted at Source and TCS is Tax Collected at Source in India. The Central Board of Direct Taxes (CBDT), has issued a circular dated August 5, in view of genuine difficulties being faced by taxpayers. Through the circular, the government said it has relaxed the provisions of TDS/TCS, as per the Income-tax Act, in the event of death of deductee/collectee before linking of PAN and Aadhaar. In order to redress the grievances of the taxpayers wherein instances have been cited, of demise of the deductee/collectee on or before May 31, 2024 and before the option to link PAN and Aadhaar could have been exercised, the circular provides that there shall be no liability on the deductor/collector to deduct/collect the tax under the relevant section of <keyword id="19936187" type="General" weightage="20" keywordseo="income-tax-act" source="keywords">income tax act</keyword>, pertaining to the transactions entered into up to March 31, 2024. On April 23, 2024, CBDT extended the date for linking of PAN and Aadhaar May for the taxpayers (for the transactions entered into up to March 2024) to avoid higher TDS/ TCS, as per the income tax act. Under the provisions of the Income-tax Act, 1961, every person who has been allotted a PAN as on July 1, 2017 and is eligible to obtain <keyword id="20030312" type="General" weightage="20" keywordseo="Aadhaar-Number" source="keywords">Aadhaar Number</keyword>, is required to intimate his Aadhaar to the prescribed authority, on payment of a prescribed fee. Failure to do so shall attract certain repercussions under the income tax act. As per government, the PAN of taxpayers who have failed to intimate their Aadhaar, as required, shall become inoperative and the consequences during the period that PAN remains inoperative will be as follows: 1. No refund shall be made against such PANs 2. Interest shall not be payable on such refund for the period during which PAN remains inoperative 3. TDS and TCS shall be deducted /collected at higher rate, as provided in the income tax act.

Provisions of TDS/TCS, in case of death of deductee or collectee relaxed by govt

Up until 12.15 pm on July 23, the Indian benchmark index BSE Sensex was trading flat, as investors soaked in the the Union Budget 2024 announcements and altered positions on various sectors carefully. However, things changed fast post-noon, and within 15 minutes, the index nosedived sharply by almost 1000 points. So, what spooked investors and how will these proposed changes impact your portfolio returns? Read on! <h2>Increased <keyword id="173153" type="General" weightage="20" keywordseo="capital-gains-tax" source="Orion">capital gains tax</keyword></h2>The major reason behind the sharp fall was the finance minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword>'s proposed several changes in the <keyword id="20619608" type="General" weightage="100" keywordseo="capital-gains" source="keywords">capital gains</keyword> taxation regime. The FM announced an increase in short-term capital gains (STCG) rates on certain assets to 20% from 15%. Additionally, long-term capital gains (LTCG) on certain specified assets will now be taxed at 12.5% from 10%. To soften the blow, she announced a hike in the LTCG exemption limit to Rs 1.25 lakh per year. Unlisted bonds and debt mutual funds will continue to be taxed at the applicable rate. “While the increase in capital gains exemption from ₹1 lakhs to ₹1.25 lakhs will encourage the middle class to invest more in equities, mutual funds, and other linked products, an increase in long-term capital gains tax to 12.5% will have a significant impact on HNIs' decision process of investing in alternative asset classes where money is typically tied in for 4-5 years,” says Ms Pearl Agarwal, Founder and Managing Partner, Eximius Ventures. For the unversed, stocks held for less than a year are classified as short-term, and shares held for more than 12 months are termed long-term. Similarly, different asset classes carried different holding periods to be classified as either. Now, according to the Memorandum of the Finance Bill 2024, the finance minister intends to rationalise and simplify the capital gains taxation with a three-pronged approach. The Memorandum proposed that there will only be two holding periods for differentiating between long- and short-term: For all listed securities, the holding period is proposed to be 12 months, and for all other assets, it shall be 24 months. Thus units of listed business trust will now be at par with listed equity shares at 12 months instead of earlier 36 months. The holding period for bonds, debentures, gold, unlisted shares and immovable property will reduce from 36 months to 24 months. This reclassification is also expected to benefit investors as more and more assets with much shorter holding periods will be classified as long-term. <h2>Increased tax on <keyword id="47029" type="General" weightage="20" keywordseo="futures" source="Orion">Futures</keyword> and Options (<keyword id="44618" type="General" weightage="20" keywordseo="FO" source="Orion">F&amp;O</keyword>) transactions</h2>The government came down hard on the equity derivatives segment or the Futures and Options (F&amp;O) as it increased the Securities Transaction Tax (STT). According to the FM speech, "It is proposed to increase the rates of STT on sale of an option in securities from 0.0625 per cent to 0.1 per cent of the option premium, and on sale of a futures in securities from 0.0125 per cent to 0.02 per cent of the price at which such futures are traded." The move was largely in the expected lines, amid the unprecedented spike in futures and options (F&amp;O) trading across India. The government has often tried to curtail speculative trading with higher taxes to discourage retail investors from losing money similar to previous instances of higher taxes on income from lottery or cryptocurrencies. India's monthly F&amp;O turnover has risen dramatically to a record Rs 8,740 lakh crore (or $1.1 trillion) in March 2024 compared to a mere Rs 217 lakh crore (approximately $ 27 billion) in March 2019, accounting for over 80% of such trades in the world. However, market experts do not expect a major change in the net impact due to the recent drop in exchange turnover charges. "While STT has been increased on both Futures and Options from 1st October 2024, this is the same date when exchange turnover charges will be reduced. In my view the net impact of this will be largely net neutral for the customer. Example, STT on Options will increase by ₹3.75 per ₹10,000 round trip premium turnover while exchange turnover charges should reduce by approx ₹3.50 to ₹4," says Ashish Nanda, President and Head - Digital Business, Kotak Securities. To summarize, the proposed changes aim to streamline and simplify the capital gains taxation system by reducing the holding periods and adjusting the tax rates. The amendments will affect various financial instruments differently, with long-term capital gains on listed equity shares, equity-oriented funds, and business trusts seeing new exemption limits, while unlisted bonds and debt instruments will be subject to the regular applicable tax rates without indexation benefits. (With inputs from agencies)

Budget 2024: Tax alterations affecting stock markets — capital gains tax, STT on F&O, and more

With Indians rushing to file their ITRs ahead of the July 31st deadline that's coming up tomorrow, did you know that residents of just one Indian state are exempt from filing <keyword id="19901478" type="General" weightage="20" keywordseo="income-tax" source="keywords">income tax</keyword> returns, or paying taxes at all? Yes, <keyword id="19903425" type="General" weightage="20" keywordseo="Sikkim" source="keywords">Sikkim</keyword> is the only state in the country where the residents do not have to pay income tax. But why is that the case? Let's delve into it. An erstwhile princely kingdom for almost 333 years prior to its amalgamation, Sikkim merged into independent India in 1975, thereby becoming the country's 22nd state. But this happened on one condition- that it will be allowed to continue with its old <keyword id="21152786" type="General" weightage="20" keywordseo="tax-laws" source="keywords">tax laws</keyword> post the merger. Sikkim has its own income tax manual, which stipulated that no resident of Sikkim was to pay taxes to the center. Hence, honoring the merger agreement, the Indian government granted a special tax exemption to Sikkimese residents from Indian income tax regulations. This changed in 2008, when the <keyword id="19908389" type="General" weightage="20" keywordseo="Union-Budget" source="keywords">Union budget</keyword> repealed the state's tax laws. However, to maintain the exemption status enjoyed by the state's residents, it inserted section 10 (26AAA). Under this section, any income generated by a Sikkimese, be it from a source within the state, or by way of dividend or interest on securities, would be tax-exempt. At present, any individual who has been domiciled (noted as having fixed, principal and permanent residence) in Sikkim as of April 26, 1975 would be considered a Sikkimese, and hence, exempt from paying income tax. As per data from PRS Legislative Research, the state's estimated own tax revenue for 2023-24 stood at Rs 1,727 crore. However, if a Sikkimese has rental income from properties situated outside of the state, or has an income from source that is not located in Sikkim, it will be subject to relevant taxes. Nevertheless, the provisions of tax exemptions would not apply to any Sikkimese woman, who marries a non-Sikkimese or an outsider, on or after April 1, 2008. Market regulator SEBI has also exempted residents of Sikkim from mandatorily having a PAN card for investing in Indian stock markets, equities, cash market and even mutual funds. <h2>Decoding Section 10 (26) of the IT Act</h2>All these income-tax exemptions also extend to a few other regions in the country, but only if you are a member of the scheduled tribes. Section 10(26) of the Income Tax Act applies to Ladakh, Arunachal Pradesh, Manipur, Mizoram, Nagaland and <keyword id="19919396" type="General" weightage="20" keywordseo="tripura" source="keywords">Tripura</keyword>, along with the North Cashar hills district, Karbi Anglang district, Chakma district, Mara district, and Lai District. Simply put, it stipulates that if you belong to the scheduled tribes and generate any income, the source of which lies in the above mentioned regions, or by way of dividend or interest on securities, your income would be tax-exempt. But any income generated outside of these regions would be taxable.

You Searched For "property tax collection in India" and got 11 results

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My family bought a vacation home in Lake Tahoe for $113,000. A new tax could push us out.

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Provisions of TDS/TCS, in case of death of deductee or collectee relaxed by govt

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Budget 2024: Tax alterations affecting stock markets — capital gains tax, STT on F&O, and more

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