November 19, 2019
“In 1790, the nation which had fought a revolution against taxation without representation discovered that some of its citizens weren’t much happier about taxation with representation.”–Lyndon B. Johnson
We at InvestmentMitra do not see budget proposals in the light of good or bad, rather we try to explore the proposed provisions and align our investor’s portfolio of investments accordingly. Salient features of these budgets that impact personal investments are as under:
Ø Long term capital gains tax on equity shares and equity oriented mutual funds exempt only upto one lakh and any excess gains over one lakh will be taxed @10%.
Ø Dividend distributed by equity oriented mutual fund schemes including balanced funds will be subject to tax@10%.
Ø Upto 40% withdrawal from NPS will be exempt from tax for all subscribers.
Ø For senior citizens premium paid for health insurance will be tax deductible upto Rs. 50,000/-.
Ø For senior citizens investment limit under Pradhan Mantri Vaya Vandana Yojna paying interest @8%p.a. increased upto 15 lakhs.
Ø For senior citizens exemption of interest income on deposits with banks and post offices to be increased from `10,000/- to `50,000/- and TDS shall not be required to be deducted on such income, under section 194A. This benefit shall be available also for interest from all fixed deposits schemes and recurring deposit schemes.
Ø Interest earned on 7.75% GOI bonds in excess Rs.10,000/- will be subject to TDS.
Ø Period of holding for capital gains bonds u/s 54 increased from 3 to 5 years.
Ø Tax treatment for equity oriented fund of funds investing in ETF that invest in shares of domestic companies will be at par with regular equity funds.
Ø For real estate sale transactions, no adjustment shall be made in a case where the circle rate value does not exceed 5% of the consideration.
It becomes imperative to realign your investments in the light of the new proposals to enjoy better tax adjusted returns. Contact your advisor or you may write to us by texting or whatsapp on this number or email to email@example.com/or firstname.lastname@example.org