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    Hello and welcome to a webchat with Mr AK Bhattacharya on analysis of the Union Budget 2016

  • T

    T K BASU

    What is the budgetary provision on TDS — on house rent received, for instance?


    Nothing that I have noticed so far. The procedures for tax deduction at source have by and large been eased.

  • K


    Sir, what are the most striking features of this Budget?


    I would mention three points. One, it has managed to stick to the path of fiscal prudence in spite of the huge pressure on it to stray from it - thanks also due to the Seventh Central Pay Commission's recommendations plus the demand for One Rank One Pension for the armed forces. The ball is now in the court of the Reserve Bank of India to reciprocate by easing liquidity and reducing interest rates. Two, it has made a bold attempt at settling tax disputes by setting up dispute settlement bodies for a variety of cases as also by introducing a presumptive taxation system that makes tax-paying relatively easy, without the hassle of complicated procedures. Three, it has been modest about its revenue growth projections for next year while keeping a tight leash on expenditure, improving the chances of next year's key targets to be met without any needless huffing and puffing by finance ministry mandarins.

  • A


    The Budget is more pro-rural than pro-corporate. It has little to offer for the middle class,which was the government's focus earlier. Do you think this shift in position is in keeping with the coming elections in UP?


    It may be pro-rural, but it would be wrong to presume that it is not pro-corporate. It has many proposals that suggest the Budget has tried to create a more friendly economic policy environment for companies - both in the country and those investing from abroad. The middle class too is likely to gain from this Budget, as it gets some tax relief, though its big expectations on a rise in the tax exemption limit and such other concessions have not been met.

  • U


    Sir, shouldn't infra be given more focus than the rural sector? I mean, the rural economy is not as robust as urban and usually depends on weather. Wouldn't more emphasis on asset creation be better?


    I agree with you. And I think this Budget does provide adequate investments for this sector.

  • M


    Sir, could you please explain the Budget change in norms making EPF taxable?


    No tax will be levied on withdrawal of deposits made in EPF prior to April 1, 2016. Only 40 per cent of withdrawals of such investments made in EPF after April 1, 2016 will be taxed. This marks the entry of the EET (Exempt-Exempt-Tax) regime - proposed in the now-abandoned Direct Taxes Code.

  • S


    Is the government overprotecting the start-up culture by creating liberal business rules?


    Not really. There is a lot happening in this sector. And it helps if the government creates a more liberal framework of policy for start-ups.

  • P


    What do you think will be the impact of the budget on stock markets in the near term?


    In the short term, the stock markets should be relieved that fiscal profligacy as a path has been abandoned by the finance minister. The fear of a removal of the long-term capital gains on stock market investment for less than three years, compared to one year now, has not come true. More investments have been committed. The stock market should see all these merits and respond positively in the medium term, if not in the short run.

  • P


    How is the retrospective tax dealt with in this Budget? The Vodafone tax issue is still hanging fire...


    There is a promise of a new dispute resolution body that would take care of such cases. The assumption is that companies like Vodafone would agree to paying the tax demanded and settle the dispute without paying the penalty. The dispute resolution body is empowered to take a decision on these lines. The ball is now in the court of Vodafone and such companies which have been victims of India's retrospective taxation laws.

  • A


    What will be the impact of the Budget provisions of PPF? What is the rate of interest now?


    It will be difficult to answer this question. It is likely that many savers would move away from this instrument of saving. The current rate of interest is quite attractive and way above other competing instruments because of the tax advantage you get. Now that there is going to be a sunset clause for this, its attractiveness as a savings instrument will take a hit.

  • K


    Was this Budget common-man-friendly?


    It has been friendly to the common man by not imposing any higher taxes either by way of excise or service tax on goods and services of consumed by her. Looking at it another way, the cause of fiscal equity has been served to a great extent when the super rich (earning over Rs 1 crore, and perhaps numbering a little over 50,000 rich tax-payers in this country) gets to pay more tax and the purchase of luxury cars now attracts an additional duty of one per cent. Thomas Piketty may have already begun influencing our government. To that extent the common man should be better off.

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