Dalal St seeks abolition of STT

Policy Booster Dose For Investors

- Re-examination of tax on dividends

- Withdrawal of LTCG on all equity schemes

- Removing tax arbitrage between MF and insurance in terms of switching

- Clarifying tax aspects on F&O trades

New Delhi: The biggest positive trigger for Dalal Street in the upcoming Union Budget-2022 could be any abolition of Securities Transaction Tax (STT).

Market participants will also look forward to re-examination of laws dealing with withholding tax on dividends, withdrawal of LTCG on all equity schemes, removing tax arbitrage between mutual funds (MFs) and insurance in terms of switching, and clarifying tax aspects on F&O trades, Mehta Group said in a report. The new normal these days is 'Work-from-home'. The Budget should introduce standard deduction for additional expenditure incurred by salaried class to meet communication and infrastructure requirements. Also, the government should consider increasing the limit of interest deduction paid on home loans as the pandemic has accelerated demand for bigger new homes to accommodate working space. So, incentives to support the real estate sector may include higher tax exemptions on interest and principal payments on housing loans. This will help the real estate sector immensely, the report said.

The theme of the Budget will continue to revolve around Covid-19 (increase in healthcare spending). Extra provisioning for vaccine related costs likely. The government is expected to focus on stepping up spending in priority sectors such as healthcare, the social sector, education and support to sectors like hospitality, retail, aviation, infrastructure, agriculture, construction and housing, the report said.