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[hfe_template id='11223'] [ad_1] The government is set to unveil the Union Budget for the financial year 2025-26 in February 2025. Anticipations for the Budget include initiatives aimed at bolstering India's manufacturing sector, enhancing exports, and streamlining trade processes to improve global competitiveness. The government may enhance the appeal of the new tax regime for individual taxpayers while outlining plans to gradually phase out the old tax system. For FY 2025-26, the expected nominal economic growth rate is 10.5%, an increase from the current year's rate of 9.7%. This growth is expected to be driven by higher government capital expenditure, agricultural advancements, and a boost in export activities. TAX There are ongoing discussions regarding possible personal income tax reductions for individuals earning up to Rs.15 lakh per year, with the goal of offering relief to the middle class and boosting consumption. Also expecting the government to incre...

[hfe_template id='11223'] [ad_1] With India gearing up for its Union Budget on February 1, investors in ITC will be watching closely as tax policy on cigarettes takes center stage. Brokerage Nuvama Research has predicted a low likelihood of a sharp tax hike, citing recent trends and the impact of urban economic slowdown on legal cigarette volumes. The cigarette segment remains a crucial revenue driver for ITC, contributing more than four-fifths of tobacco tax revenue in India despite accounting for less than 10% of total tobacco consumption. ITC has actively countered illicit trade by introducing differentiated and premium cigarette offerings under brands such as Classic, Gold Flake, and Bristol, Nuvama noted. Nuvama Research said that a modest tax hike last year and gradual recovery in legal cigarette volumes, which grew approximately 3% year-over-year (YoY), make significant tax increases improbable for the upcoming budget. However, any potential sharp hike—exceeding 1...

[hfe_template id='11223'] [ad_1] In the pursuit of low-risk monthly income, investors often seek strategies that balance growth potential with stability especially if someone is closer to retirement. Alekh Yadav, Head of Investment Products at Sanctum Wealth, addresses key considerations for such investors, particularly those like Rajiv Tandon, a senior citizen aiming for steady returns. Yadav outlines the advantages of using hybrid funds, such as balanced advantage funds, alongside a Systematic Withdrawal Plan (SWP) to generate consistent income. These funds, with a blend of equity and low-risk instruments, offer favorable tax treatment and provide a safer alternative to sector funds, which can be volatile and require precise timing. Additionally, Yadav explores the potential of equity savings funds for low-risk, inflation-adjusted returns and highlights upcoming opportunities in hybrid funds following changes in the Union Budget of 2025. Query from Ranjiv Tandon: Inves...

[hfe_template id='11223'] [ad_1] While the domestic gush of liquidity has dismissed the impact of capital gains tax hike, expensive valuations and a not-so-great Q1 earnings season, foreign institutional investors (FIIs) have sold Indian stocks worth at least Rs 30,000 crore since Budget. In the last 17 trading days since Budget was presented on July 23, Sensex is weaker by around 1,400 points or 1.7% as FIIs have been incessantly pressing the sell button almost every day. Is it just about the capital gains tax hike issue? No, say experts. “FIIs are concerned only about the elevated valuations in India, nothing else. The enthusiasm of retail investors and the sustained flow of money into domestic institutions are keeping the valuations elevated, particularly in the mid and smallcap segments. The demand for stocks far exceeds the supply, keeping the valuations high. This demand-supply mismatch is likely to continue for sometime,” says V K Vijayakumar, Chief Investment Str...

[hfe_template id='11223'] [ad_1] The increase in capital gains tax in the Union Budget makes it tougher for PMS fund managers, who handle money for rich investors, to beat the good old mutual funds. While MFs themselves are not taxed when they churn portfolios, crorepati clients of PMS schemes are taxed, which can lead to inferior post-tax returns. With 20% short-term capital gains tax and 12.5% long-term capital gains tax, the difference in tax rates is now 7.5%, which was 5% earlier (with 15% STCG and 10% LTCG). As a result, PMS funds now need to maintain an alpha of 2% to 4% annually over mutual funds only to match post-tax returns. "If a mutual fund returns 12% a year, for an equivalent post-tax return, a PMS needs to return 13.97%. If a mutual fund returns 15%, the PMS has to make 17.53%. This is based on the assumption of 100% short-term gains in PMS, and that all taxes on capital gains and dividends are removed from the portfolio each year," Krishna Appa...

[hfe_template id='11223'] [ad_1] India's Finance Minister Nirmala Sitharaman on 23rd Jul’24 presented the Union Budget 2024-25. This was the first budget of Prime Minister Narendra Modi’s third term in the government. Overall, the broad themes from the interim Budget remained unchanged. The Union budget 2024-25 focused on infrastructure, fiscal consolidation, job creation, MSMEs, women, and agricultural support. Broadly speaking, there were six key differences: 1) as expected, the GoI increased its dividend income from the financial institutions (including the RBI) by Rs 1.3 trillion in FY25. With broadly unchanged gross taxes and non-debt capital receipts, the GoI’s total receipts have been revised up by Rs 1.3 trillion. 2) About 57% of these additional resources have been used to reduce fiscal deficit (by Rs 722 billion), while the remaining 43% (Rs 547 billion) have been used to increase total spending 3) Within total spending, capital spending has been kept uncha...

[hfe_template id='11223'] [ad_1] Shares of agriculture and fertiliser stocks jumped up to 9% intraday on Tuesday after Finance Minister Nirmala Sitharaman announced Rs 1.52 lakh crore provisioning for agri and allied sectors in the Budget. In the Budget speech, Sitharaman said the government in partnership with states will promote digital public infra for agriculture. Also Read: Budget 2024 | Stock Market LIVE Updates: Sensex rises 100 pts as Budget speech begins; Nift above 22,500 While Kaveri Seeds is trading 9% higher, Dhanuka is up about 6%. Meanwhile, Coromandal Chemicals and Bio Fertilizers is trading 0.34% lower from previous close. Nova Agritech, on the other hand, rose nearly 4%. Sitharaman said the farmer and land registry will have details of 6 crore farmers and the government will also ensure Kisan credit cards in five states.Finance Minister Nirmala Sitharaman has also announced Research based setups for raising productivity and Developing climate resistant ...

[hfe_template id='11223'] [ad_1] With the Union Budget scheduled on July 23, 2024, we expect it to be growth-oriented with focus on manufacturing, capex and infrastructure creation. The mandate of the BJP in NDA-II (starting FY25) is much stronger than during NDA-I. This was quite visible in the Cabinet allocation, wherein the BJP retained most of the high-profile departments with their ministers. During the past decade, the BJP has very carefully created an image of a clean government, minimizing wasteful spending and corruption, making the Budget more transparent by reducing off-budget expenditure/borrowings leading to higher capex allocation, resisting calls for large rural support, and maintaining fiscal prudence. We strongly believe (and hope) that there will not be substantial changes in its mindset/philosophy, creating policy continuity. Coalition politics, however, could make it more challenging to pass legislation on the more ambitious parts of the government re...

[hfe_template id='11223'] [ad_1] Last week, I wrote about my expectations of the Union Budget. This time, I want to talk about how to understand the Budget in a very simple way. A country’s Budget is nothing but the plan of how it will meet the expenses and arrange means to achieve them via income sources. A Budget is a financial statement that documents the government’s expected expenditure across all fields for the next year and matches it with the income or receipts expected from various sources. In India, in other than general election years, on every 1st Feb, the Budget Estimate (BE) for the upcoming financial year is presented, along with the Revised Estimate for the ongoing financial year and actual figures for the previous financial year. The Revised Estimate (RE) is an updated version of the Budget Estimate, reflecting changes and adjustments made during the fiscal year. The Actual figure represents the final, audited amounts of government revenues and expenditu...

[hfe_template id='11223'] [ad_1] The US economic surprises are now the most negative since 2015. Month-on-month CPI print at -0.1% is the lowest in four years. Fed members have been reiterating that they want to be more confident about inflation reaching the 2% target and the latest June inflation print should help in that regard. Deceleration in sequential core services momentum is a positive. Latest jobs report also showed that the unemployment rate crossed 4% for the first time since November'21. Other high frequency indicators pertaining to housing, retail sales and industrial activity have also been softening. As we move lower and to the right in the Phillips curve, we could see the Fed narrative shift. The market implied probability of a cut in September stands at 90%, compared with 50% a month ago. Markets are pricing in 2.5 cuts by the end of 2024. We believe cutting rates in a stepwise manner while monitoring how the economy evolves would be a better approac...

[hfe_template id='11223'] [ad_1] India's benchmark indices surged to fresh new highs on Thursday, with the Sensex closing above 81,000 and Nifty ending above 24,800 for the first time. The rally was led by gains in information technology (IT) stocks ahead of Infosys' first quarter results which were announced after trading hours on Thursday. The BSE Sensex ended at 81,343.46 up 626.91 points, or 0.78%, after hitting its lifetime high of 81,522.55. NSE's Nifty rose 187.85 points, or 0.76%, to a close at a record 24,800.85. The index hit an all-time high of 24,837.75 during the day. "We see the Nifty crossing 25,000 on or before the Union budget itself, and in case there is no negative news in the budget, it can extend further," said Rajesh Palviya, head of technical and derivatives research at Axis Securities. "This time the rally is purely led by large-cap stocks, while small- and mid-caps are seeing some sideways consolidation and profit takin...

[hfe_template id='11223'] [ad_1] While many other institutional investors have been raising red flags over the non-stop rise in share prices in the broader market, Joanne Goh, Senior Investment Strategist of DBS Bank, prefers small and midcaps on a risk-adjusted basis, saying that high growth potential offers opportunities for significant returns. "With the near doubling of public capex in the government’s agenda, capex recovery is likely to continue driving economic and corporate earnings growth for equity markets in the near future," she says. In this chat with ETMarkets, Goh also shares expectations from Budget, earnings outlook and more. A consensus view on Dalal Street is growing that the upcoming Union Budget will be in sync with the existing agenda around capex, growth, and manufacturing. What are your expectations? The incumbent NDA coalition is expected to follow through with policies that were kickstarted in the previous term, including expanding the ...

[hfe_template id='11223'] [ad_1] The overall theme of the Interim Union Budget 2025 was being prudent and focusing on long term growth. The fiscal deficit for F2025 had been estimated at 5.1% as against 5.8% in F2024. There were no populist measures either, in fact the overall subsidy has been reduced by ~8%. The overall Capex spent by the government has increased an impressive 6.8x in the last 11 years. The RBI dividend of Rs 2.1 trillion or 0.4% of the GDP announced in May has added an extra cushion of Rs 1.3 trillion to the fiscal spends. (Source: India Budget, JM Financial Research) We believe this incremental gain in revenues would be partly spent in increasing rural expenditure, something which was missing post COVID era. In F2021 the govt. had increased rural spend by 38% to Rs 3.9 trillion. But since then the expenditure has been declining and is still lower than F2019 levels. After Mahatma Gandhi National Rural Employment Guarantee Program (NREGS), the second b...

[hfe_template id='11223'] [ad_1] With return-hungry investors pricing in most of the expected boost from the Union Budget well ahead of July 23, the chances of a post-Budget rally looks miniscule if historical trends are taken into account. An analysis of market behavior around Budget days shows that in the last 30 years, Sensex has been up 30 days before and after the Budget only on two occasions - 2006 and 2017. The market has fallen on two of three occasions in 30 days post the budget and the probability of such a fall rises to 80% if the market has risen in the 30 days preceding the Budget, according to a report by Morgan Stanley. "This year, India is tracking higher on both an absolute and relative basis and if it were to hold this performance into the budget day, then there is a strong likelihood that it corrects post budget," said Ridham Desai of Morgan Stanley. According to another analysis of 24 budget days since the year 2000, investors seem to reduce...