Tag: budget 2020

Explained: PM Modi to launch National Logistics Policy on September 17, what is it?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Prime Minister Narendra Modi will unveil the National Logistics Policy on Saturday. The policy is aimed at enabling the seamless movement of goods across the country

“On September 17, the Prime Minister is going to release the country’s logistics policy,” Piyush Goyal, Minister of Commerce and Industry, told the members of the Board of Trade.

What is the policy?

First introduced in the Budget 2020 speech by Finance Minister Nirmala Sitharaman, the National Logistics Policy aims to facilitate the movement of goods across the country. Currently, high logistics costs bring down the competitiveness of domestic goods in the global market. Logistics spending in India stands at around 13-14 percent of India’s gross domestic product (GDP), said Goyal. Countries like Germany and Japan which are consistently ranked high for their logistics infrastructure and systems spend around 8-9 percent of their GDP on logistics costs, in comparison.

What will the policy do?

While the details will emerge only after the policy is launched, the government is focusing on processes such as re-engineering, digitisation and multi-modal transport to bring down logistics costs and improve efficiency. The government aims to reduce indirect logistics costs by up to 10 percent, which the government says will lead to an increase in exports of 5-8 percent.

The government has already been trying to improve India’s logistic operations and infrastructure under initiatives like the construction of Multimodal Logistics Parks, the creation of the Unified Logistics Interface Platform (ULIP), and investment under the PM GatiShakti National Master Plan as announced in this year’s Budget speech.

Whom will the policy affect?

The policy will directly affect India’s logistics industry. The industry consists of over 20 government agencies along with 40 partner government agencies. Other stakeholders include 37 export promotion councils, 200 shipping agencies, 36 logistics services, 129 inland container depots, 168 container freight stations and 50 IT ecosystems, banks and insurance agencies. In total, the industry handles over 10,000 commodities spread across 500 certifications with a $160 billion market size.

A total of 22 million people are estimated to be employed in the industry. Apart from directly affecting the logistics industry, the policy will affect every industry that has to move goods physically from one place to another. As logistics costs come down and efficiency increases, companies will be able to earn more through increased margins.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Home buyers may get higher tax deductions on home loans in Budget next month: Report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In a bid to boost housing demand and offer relief to taxpayers, the Centre may offer higher tax deductions on home loans in the upcoming budget, report said.

Finance Minister Nirmala Sitharaman may increase the annual tax deduction limit on principal payment of housing loans under Section 80 C of the Income Tax Act, Mint reported quoting two officials familiar with the development.

Currently, the limit is capped at Rs 1.5 lakh which can be raised to Rs 2 lakh in the Budget next month.

Recommending tax incentives on both the supply and demand sides for the real estate sector, property consultant Knight Frank India said the government could drive investor interest in housing by offering a separate annual tax deduction of Rs 150,000 for principal repayment, Moneycontrol reported. Without such incentives, consumers could be indifferent to house purchases, the property consultant said.

The government had last increased the deduction limit under Section 80C to Rs 1.5 lakh a year in 2014. An increase would give relief to taxpayers from the surge in expenses amid the pandemic and rising inflation, Sudhakar Sethuraman, a partner with Deloitte India, told Mint.

Taxpayers can also invest in other schemes like National Savings Schemes, Public Provident Fund, equity-linked saving scheme and ULIP to claim deductions under Section 80 C of the Income Tax Act.

The finance and housing ministries did not comment on the budget expectations.

Realtors also hope the government would raise the home-loan tax rebate under Section 24 from Rs 2 lakh to Rs 5 lakh. Such a move would instantly spur housing demand, especially in the affordable and mid-segment categories, Anuj Puri, chairman, Anarock Group, told Financial Express.

However, some experts feel the government is unlikely to offer tax sops as it introduced a new tax regime in the 2021 budget. The new tax regime offers lower tax rates but does not have deductions and only a few taxpayers have opted for it.

The government’s emphasis on the new tax regime may discourage it from expanding deductions in the old tax regime, Mint quoted Ved Jain, former president of the Institute of Chartered Accountants of India, as saying.

The real estate sector saw a strong comeback in 2021 as residential property sales reached over 90 percent of the pre-pandemic levels. The housing inventory overhang in top seven cities, which stood at 55 months by 2020-end, dropped to 32 months by 2021-end, Mint reported quoting data from Anarock.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Announced in Budget 2020, Kisan Rail to begin services from Friday

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The railways will begin its Kisan Rail services to transport perishables from August 7, it said on Thursday, adding the first such train, carrying vegetables and fruits, would run between Devlali in Maharashtra and Danapur in Bihar.

Finance Minister Nirmala Sitharaman had announced this initiative in her Budget speech earlier this year envisaging setting up of a ‘Kisan Rail’ through the public-private-partnership (PPP) mode for a cold supply chain to transport perishable goods.

“As announced in the current year’s Budget to start ‘Kisan Rail‘ for providing a seamless supply chain of perishable produce, the Ministry of Railways is introducing the first Kisan Rail from Devlali to Danapur on August 7 at 11 am on a weekly basis…,” the ministry said in a statement. The train will reach Danapur at 6.45 pm on the next day, covering 1,519 km in 31.45 hours, it said.

Central Railway, Bhusawal Division is primarily an agro-based division and Nasik and the surrounding region produces huge quantities of fresh vegetables, fruits, flowers, other perishables, onions and other agro products.

These perishables are mainly transported to areas around Patna, Allahabad, Katni, Satna and others.

The Kisan Rail has been provided scheduled halts at Nasik Road, Manmad, Jalgaon, Bhusaval, Burhanpur, Khandwa, Itarsi, Jabalpur, Satna, Katni, Manikpur, Prayagraj Chheoki, Pt. Deendayal Upadhyay Nagar and Buxar.

“Aggressive marketing is being done with local farmers, loaders, APMC and individuals. Wide publicity is being done in print and electronic media. Demand is being aggregated and it is expected that the train will be patronised well and will be a great help to the farmers, as the freight of this train will be charged at ‘P’ Scale,” the statement said.

The proposal to use refrigerated parcel vans to ferry perishables was first announced by then railway minister Mamata Banerjee in the 2009-10 Budget. However, it failed to take off.

Since then, the railways has commissioned temperature-controlled perishable cargo centres at Ghazipur Ghat (UP), New Azadpur (Adarsh Nagar, Delhi) and Raja ka Talab (UP) as a pilot project under the Kisan Vision Project by Container Corporation of India Limited (CONCOR) through a CSR (Corporate Social Responsibility) initiative. Another project is under construction at Lasalgaon in Maharashtra’s Nasik.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

COVID-19 impact: Huge revisions to Budget 2020-2021 estimates likely, say govt officials

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government is likely to make major changes to FY21 Budget estimates due to the impact of COVID -2019, sources told CNBCTV18.

For this, a full review of the budget is likely after the end of the first quarter.

Many government officials said the first quarter will be a “write-off” and hence the government may wait out this period out before a full fledged review of the Budget.

Sources said there could be “huge revisions” to the numbers set out in the Budget estimates announced on Feb 1. There is a strong likelihood of higher revenue expenditure due to the relief measures to be announced for COVID-19 affected sectors, they said.

To create funds for this , the government may cut capital expenditure and readjust the capex allocations for revenue expenditure. In any case, demand for capex is likely to be muted and the government may instead reprioritise money under these heads for spend on health, agriculture, greater cash transfers as some of the likely priorities. The Budget had allocated around Rs 4 trillion towards capital expenditure in FY21 and a large part of this could be used for relief measures, officials explain.

For revisions , reappropriations to the Budget , the Finance ministry will need Parliamentary approval and this could be possible in the Monsoon Session.

Some officials even say , the review exercise on the budget numbers may start immediately and expenditure may actually see a cut to match resources. With the first quarter expected to be a write off, advance tax collections and divestment receipts are likely to be tepid. In addition, some of the deadlines could be extended as well.  Including capital expenditure, the government has budgeted for Rs 30.42 trillion as expenditure in FY21.

The government has so far not signalled a higher borrowing plan for the current financial year.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Centre to give states Rs 42,000 crore from FY21 budget to fight coronavirus outbreak

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The government has budgeted a total of Rs 42,000 crore towards disaster relief in the FY21 budget.  From April onwards, these budget lines will be available to states to fight against COVID-19 among other calamities.

CNBC-TV18 has learnt that the states will get at least 20,000cr as central share of the SDRF or State Disaster Response Fund. While the National Disaster Response Fund, or NDRF, which is assistance provided by Centre to States, has an allocation of Rs 22,000 crore for the new fiscal.

The Home Ministry has already categorised COVID-19 under the Disaster Management Act, for which states are entitled to use the SDRF, subject to certain limitations. For instance, expenditure on relief operations by states is capped at 25 percent of the SDRF.

It’s also to be noted that the centre doubled the NDRF allocation in the revised estimate this year from approximately Rs 10,000 crore to Rs 20,000 crore. Similarly, the SDRF has been almost doubled from Rs 10,937 crore in FY20 budget to Rs 20,000 crore in FY21 budget.

Under SDRF, the centre-state contribution is 75:25 while for hilly states and North East its 90:10. The entire Rs 20,000 crore under SDRF is the centre’s contribution as per Finance Commission rules.

However, one issue that crops up is that some states show unspent balances in SDRF. For instance, as per April 1 estimates of 2019, states like Gujarat, Punjab, Haryana, Jharkhand among others, had sizeable unspent money in SDRF. The revised position of the SDRF unspent balance of each state will be known after April 1 now.

The norm is that states are encouraged to utilise the SDRF first, before seeking central assistance from NDRF. Hence the centre, while releasing money from the NDRF, adjusts the amount against 50 percent of the unspent balance in SDRF. In such cases, 100 percent assistance from NDRF to states is not possible.

In the meanwhile, the centre expects funds allocated in FY21 to be used quickly on covid-19 related relief operations, given the fact that spend on relief work is capped at 25 percent of the SDRF.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Increasing student inflows boost demand for housing in Pune, Bengaluru, and NCR, says report

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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As the total number of foreign students enrolled in India has risen by 36 percent since 2012-13 because of a slew of recent government measures, the demand for student housing has never been higher.

To boost ‘Study in India’ initiative, the government  has declared an Ind-SAT program in the previous Budget, proposed to be held in Asian and African countries to attract overseas students to Indian universities.

In the recent Budget, finance minister Nirmala Sitharaman allocated Rs 99,300 crore towards the education sector and Rs 3,000 crore for skill development.

The government expects to attract 200,000 international students to India, more than four times the current number. Currently, the total number of foreign students enrolled in India is 47,427 from 164 different countries.

This number has risen by 36 percent since 2012-13 when the number of international students in India was a little over 34,770, according to an ANAROCK Property Consultant report.

The last three years have seen a fairly decent growth of 6.55 percent in terms of number of beds in hostels across the top ten states. However, it has not kept pace with the increase in student enrolments.

In 2017-18, the total enrolments were estimated at 36.6 million, while the hostel intake was 6.5 million. In 2018-19, the number of enrolments rose to more than 37 million, while hostel intake still stood at 6.5 million, it said.

Hostels and residential facilities in Indian educational institutes can meet only a fraction of the student housing demand.

Pune:

A major IT hub and emerging Smart City, Pune’s educational offerings have earned it the moniker of ‘Oxford of the East’. Home to nearly 3 lakh students, it is one of India’s largest education centres which attracts students from across India and beyond. Not surprisingly, Pune has witnessed a spurt in students’ accommodation development with national players such as Stanza Living, Oxfordcaps and Your Space establishing presence and planning aggressive expansion.

Bengaluru

Apart from the IT/Tes industry, education sector also boosts Bengaluru’s real estate market. According to the HRD Ministry’s All India Survey on Higher Education 2018-19, Bengaluru Urban District tops in the number of colleges with 880.

Every year, the city attracts thousands of local, outstation and expatriate students. In fact, with over 10,000 overseas students, Karnataka has had the highest number of students coming from foreign countries.

Delhi-NCR

Home to the country’s top colleges at Delhi University campuses and dozens of private educational institutes, Delhi has traditionally attracted students from various places. Kamla Nagar, Vijay Nagar and Hudson Lane in the north campus and Satya Niketan, Anand Niketan in the south campus, scores of student accommodations have come up across the city.

The neighbouring pockets of Noida and Gurgaon have also seen a spurt in private colleges, creating demand for student housing. Sectors 121, 63 and 73 in Noida and Sohna Road in Gurgaon are preferred locations for student housing.

Major players: Stanza Living, Placio, CoHo, Your Space, Oxfordcaps, Nest Away

Areas of presence: Vijay Nagar, Kamla Nagar, Satya Niketan, Hauz Khas, Noida Sector 121, 63 and 73, Sohna Road

Average rate per bed: Rs 8,000 -20,000 a month

New emerging centres

Apart from these leading cities, new student housing opportunities are emerging in tier 2 and 3 cities such as Kota, Pilani, Indore, Nagpur and Mesra, which have premiere educational institutes.

These smaller cities provide more lucrative opportunities for investors in this segment because of low land costs and scope for expansion and experiment.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

How the misuse of India’s treaty with Mauritius is leading to tax revenue loss

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The system for taxation of dividend income has been overhauled in India’s budget proposal for 2020. The dividend is the portion of a company’s profit that it distributes to its shareholders. Under the classical system of dividend taxation, the dividend is taxable in the hands of the shareholders. Most countries use this system to levy tax on dividends. In India, the dividend was hitherto taxed in the company’s hands at the time of distribution. The budget proposes to shift from this system to the classical system.

This move enhances the ease of doing business in India. When overseas shareholders in an Indian company are taxed in India as well as in their home country, they can take shelter under the Double Taxation Avoidance Agreement (DTAA) to get credits for tax paid in India in their home country.

Yet, there may be some unintended consequences of this move. The dividend income of Indian residents is taxable at the applicable rate, which can go up to as high as 42 percent effective rate for High Networth Individuals (HNIs). However, the India-tax on the same income for a shareholder from Mauritius is 5 percent if the shareholder owns more than 10 percent capital of the company. Mauritius does not levy a tax on the dividend income of its residents.

Thus, the effective tax rate on dividend income varies from a high of 42 percent to a low of 5 percent. This is a significant arbitrage to promote treaty shopping behaviour.

The ‘Mauritius route’ was famed as a channel used by foreign investments into India. Capital gains accruing to foreign investments coming through Mauritius were exempt in India due to the India-Mauritius DTAA. As a result, many foreign investors used to incorporate conduit companies in Mauritius and bring their money into India through the conduits. Between 2004 and 2014, about 39 percent of total Foreign Direct Investment into India was from Mauritius. Since Mauritius is a small island without the economic capacity to generate such huge capital, experts believed that these were ‘indirect’ investments through Mauritius.

The DTAA was speculated to have been widely misused by Indian residents to round-trip their investments in India through Mauritius.

India’s Mauritius DTAA was amended in 2016 to plug this loophole. Limitation of Benefits (LoB) clause was also inserted to limit benefits under the DTAA to shell companies or conduit companies that seek to abuse the treaty to save tax. However, a closer study of LoB rules reveals that the limitation of benefits is only for tax on capital gains. It is not applicable to dividend income.

Anti-abuse provisions

A multilateral convention to prevent base erosion and profit shifting was convened by the Organisation for Economic Cooperation and Development (OECD) in 2016. This convention adopted a Multilateral Instrument (MLI) with an objective of introducing anti-abuse provisions in various DTAAs. MLI includes a provision to refuse the shelter of a DTAA (if the DTAA is covered by the MLI) if the principal purpose of a business arrangement is to save tax. It is gauged by using a Principal Purpose Test, which is a minimum standard under MLI.

While both India and Mauritius are signatories of MLI, Mauritius has not included its DTAA with India within the scope of its MLI compliance. As a result, anti-abuse provisions such as PPT are not applicable to India-Mauritius DTAA.

In the absence of any anti-abuse provision in DTAA, there is an apprehension that some investors from other countries may try to abuse the India-Mauritius DTAA to reduce their dividend tax liability. The possibility of Indian residents investing in India through Mauritius is an even greater concern.

However, the apprehensions are largely misplaced. Business arrangements with a principal purpose of reducing tax liability generally lack commercial rationale. Such arrangements use complex corporate structuring with the sole purpose of taking advantage of the DTAA. General Anti-Avoidance Rules, which is applicable from the financial year 2017-18, provides safeguards against this kind of treaty shopping. Thus, anyone who intends to abuse the India-Mauritius DTAA exposes themselves to significant litigation risk.

Secondly, investments yield dividends years after the investment is first made. Pillar 2 of OECD’s Inclusive Framework aims to introduce a global minimum tax rate by the end of 2020. Once Pillar 2 rules are introduced, Mauritius will be forced to tax its residents at a minimum rate. Thus, whatever arbitrage is available for abusing India-Mauritius DTAA is for a limited period, and open to significant litigation risk.

Smarak Swain is a joint commissioner at the income tax department and the author of the bestselling book ‘Loophole Games: A Treatise on Tax Avoidance Strategies’. The views are personal.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

TDS trouble: How the new tax on mutual funds affects small investors

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mutual funds are a popular financial instrument among investors, thanks to their propensity to beat inflation. Systematic investment plans (SIPs) have made it possible for even low-income individuals to invest in such funds.

In fact, most low-income earners prefer mutual funds over fixed deposits (FDs) owing to the absence of tax deducted at source (TDS).

What has changed for the mutual funds in Finance Minister Nirmala Sitharaman’s second Budget that was presented on February 1?

The Union Budget has introduced a 10 percent deduction of tax on income from mutual funds (dividend)  if it exceeds Rs 5,000 a year from April 1.

Jitendra Solanki, a Delhi-based Sebi-registered tax and investment expert, says the TDS on mutual funds will have an adverse impact on individuals who do not fall in the taxable-income bracket. Under the new rule, these individuals will also have to file a return to claim the 10 percent TDS.

However, this will not impact those who already file returns. “Now, those who do not come under taxable income will also have to file returns with the Income Tax Department to avail of that deducted amount. This was mainly done, as the finance minister hinted, to bring mutual funds on a par with the FDs where TDS is already applicable on redemption,” Solanki pointed out.

At a disadvantage 

Those who do not file returns will be now at a disadvantage if they do not know how to file returns. In this case, they have to take the help of a chartered accountant, which makes it a bit cumbersome for small mutual fund (dividend income) investors.

TDS would be applicable to dividend income from mutual funds.

“Currently, TDS on capital gains is deducted only for NRI investors in mutual funds and not for resident Indians. Resident Indians are required to pay taxes on a self-assessment basis,” Solanki noted, adding that TDS deduction will help authorities gather information on gains accrued by a taxpayer through mutual funds.

According to Balwant Jain, a Mumbai-based independent tax and investment expert, the impact of this will not be much as TDS is also applicable to bank deposit interest income over Rs 10,000. Instead of the dividend option, if they choose growth option and withdraw money through a systematic withdrawal plan, they can do so without paying TDS.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Understanding ESOPs valuation: Why it is crucial for startups

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Union budget has provided for certain concessions in tax treatment of employee stock option plans (ESOPs) for startups. Globally, ESOPs have successfully aligned interests of employees with that of shareholders (mainly improvement in company’s performance and consequential appreciation in valuation of companies) and have played an instrumental role in success of many startups.

The organisations offering ESOPs are required to provide for ESOPs as expense in profit and loss statement. Providing for ESOPs as the expense has an impact on the determination of distributable profits for dividend declaration, calculation of EPS (earnings per share), determination of profits for senior management remuneration, and payment of MAT (minimum alternate tax). Therefore, it is important that ESOPs are expensed appropriately in the profit and loss statement. Indian Accounting Standards (Ind-AS) require companies to undertake a fair valuation of ESOPs when quantifying ESOPs expense amount. ESOPs fair valuation treatment is followed internationally as well and financial statements in this scenario are better appreciated globally.

For undertaking a fair valuation of ESOPs, either the Black-Scholes model or the Binomial model can be used, which are option valuation models. Simply stated, these models compute the value of the option as the difference between: (a) likely value of the share at the time of exercise of the option as discounted to present value; and (b) the present value of paying the exercise price.

Option pricing models consider a few variables such as the life of the option, exercise price, fair value per share, expected volatility of share price, expected dividend yield and risk-free interest rate for computing the value of options.

Organisations can consider the following for determining each of the variables:

• Expected life of the option: Organisations need to consider the likely life of option and not the total life of the option. So, while a stock option is available to the employee for say 10 years, there exists a possibility that the employee will exercise the stock option at the end of, say 7 years, pay the exercise price, take the shares and then sell the shares in the open market.
• It will be challenging for companies (especially startups) to estimate the “expected” life of an option. Here, companies can take guidance from the prescription suggested by the Securities Exchange Commission’s Staff Accounting Bulletin No. 107 of the USA.
• Exercise price: Organisations will not face any challenge in determining this variable as the exercise price is normally mentioned in the stock option plans.
• Fair value: For listed companies, the share price applicable on stock option grant date should be considered. For unlisted companies (including startups), an independent valuer may be appointed to determine the share value of the company as of options grant date or the value of the share can also be deduced from the recent funding round witnessed.
• Expected volatility of share price: While listed companies can consider historical volatility in their own share prices for the period that is same as the expected life of the option, unlisted companies can consider historical volatility in share prices of other listed comparable companies.
• Expected dividend yield: Companies are required to estimate the future dividend yield rate (i.e. dividend per share divided by value per share). Here, companies can take a clue from their own historical dividend yield rate or dividend yield rates of listed companies in the same industry. Startups (that need capital for growth for next few years) can consider lower dividend yield rates or even ‘nil’ depending on their capital requirements.
• Risk-free interest rate: The current yield rates in government securities (with similar residual maturity as expected life of stock options) can be considered. Data on yield rates in government securities is widely available in newspapers or on the internet.

A rigorous analysis needs to be undertaken to determine each variable used in option pricing models and if required an independent valuer may be appointed by organisations to undertake ESOPs valuation. The value of ESOPs needs to be expensed over the period during which options will vest with the employees.

Sanjeev Krishan is Partner and Leader – Deals at PwC India.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Here’s how experts decode budget 2020’s impact on HNIs

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Budget 2020 is behind us but it has perhaps been slightly more taxing for the super-rich. Not too many of their expectations were fulfilled. There are certain measures that came out in the fine print that could perhaps make life a little more tough, a little more challenging for them.

Discussing the fine print of the budget and its impact on the rich, Anshu Kapoor, Head of Edelweiss Private Wealth Management  said, “Our clients who run businesses, are business entrepreneurs found it to be a balanced budget overall. Obviously, there were expectations on the taxation side but most clients understand that given the fiscal situation and the way it was explained by the finance minister that not much could have been expected from a tax relief perspective.”

“There were a few amendments or modifications – like to the remittance scheme or to the trust etc but they may not impact them too much,” he added.

According to Girish Vanvari, Founder of Transaction Square, “It is important to understand what happened. First of all, dividend distribution tax was abolished; that was a popular ask. The people were also expecting that the dividend taxation rate in the hands of the recipient would remain the same. Presently it is 10 percent and they were hoping that 10 percent would continue and dividend distribution tax would get abolished. That 10 percent continuation has not happened.”

“The company pays 20 percent and the recipient pays 10 percent today. This 10 percent now is taxed at the regular rate of income. So, if you are a company you have to pay 25 percent, if you are an individual it could go as high as 43 percent. This would benefit if you are a non-resident and if you are a non-resident, then depending upon the treaty you fall with, you can get up to 5-15 percent,” he added.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow