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    Hello and welcome to the webchat with Arvind Rao, Certified Financial Planner, Arvind Rao & Associates on 'How will the Budget impact your finances'



  • A


    The Finance Minister has made EFP and NPS withdrawals on retirement partially taxable. Do you think one should shift from these instruments to other tax saving plans?


    EPF contributions are mandatory under the law, at least upto a certain salary limit and hence offers limited choice. But, as EPF offers fixed returns and again with sovereign guarantee, it may be difficult to match the returns with other tax-saving plans. Very recently, the EPFO has infact increased the interest rate, in a falling interest regime, which is again in the benefit of investors. Taxing 60% of the accumulated balance is indeed steep but in my opinion, the partial taxability should not deter investors from such long-term retirement saving options.

  • P


    Is PPF withdrawal also falling under the 60%-40% withdrawal limit? Do you think PPF still remains an attractive option among tax saving plans?


    In my opinion, as far as my reading of the Finance Bill has reached, I dont remember PPF being included in this regime. Thus, PPF still enjoys the EEE tax status. Probably, PPF is the only sovereign instrument that enjoys this tax status and hence for me, it continues to remain an attractive option among the tax-saving plans.

  • K


    The Union Budget announced an increase in STT on options to 0.05 per cent from the existing 0.017 per cent and imposed a tax of 10 per cent on dividends earned by an assessee in excess of Rs 10 lakh. What is your view on this?


    The lawmakers probably want to encourage long-term investors in the equity markets rather than traders. They must have probably witnessed a soar in volumes in the Option segment and hence this move. As long-term investors, individuals should not be much impacted by this move. Coming to the tax on dividends, this is definitely a dampener for investors who believe in equity investments and earning income through dividends. however, on second thoughts, 10 lakhs of dividend income, even at an average 5% dividend yield translates to approx. Rs. 2 crores of investment in dividend yielding companies, which is quite substantial. For the sake of progressive taxation, the limit laid down is a good start.

  • J


    With rents soaring in most of the top cities around the country will the increase the limit of deduction of rent paid under 80 GG from Rs 24,000 per annum to Rs 60,000 create a significant impact for salaried citizens?


    The limit u/s 80GG for deduction towards rental paid by those taxpayers, who were living on rent and not eligible for any HRA benefit has been at Rs. 2,000 for a long time. The move to increase this exemption by 250% is a welcome step. Looking at current rentals across the country, these limits may not seem to be making a great impact on the taxable income, but the enhancement in limit is substantial and will definitely help tax payers in the income category of upto Rs. 5 lakhs.

  • P


    The government has launched a new health insurance scheme aimed at families below the poverty line. Arun Jaitley said that this scheme will offer a health cover of up to Rs 1 lakh per family and for senior citizens in age group of 60 years and above, a top-up of Rs 30,000 will be available additionally. Do you think this is great move for the insurance sector?


    Yes, this is a great move towards social benefits, especially for the unorganized sector. A larger portion of the population will have access to at least some basic benefit for their medical needs and will in turn also help the insurance companies in increasing their penetration ratio.

  • M


    Will the proposed exemption on Sovereign Gold Bonds from capital gains tax on redemption an incentive to invest? What portion on one's portfolio should one invest in these bonds?


    Yes, the exemption is definitely helpful. One can consider allocating anything ranging between 10-15% of one's portfolio in gold to help as a hedge against inflation as well as for profits from any positive movement in gold prices.

  • S


    Since the EPF, PPF and NPS, will be taxed can you suggest me 3 ELSS schemes where I can put my money in an SIP form?


    ELSS continues to enjoy the EEE tax regime. In view of the same, tax payers looking to save taxes as well as save for their retirement can consider ELSS as a long-term saving option. For the purposes of SIP-based investments, Axis Long-Term Equity Fund, Reliance Tax Saver and Franklin India Tax Shield are some of the options which you may consider. These funds are counted among the better performing ELSS currently.

  • N


    As an individual retail Intraday stock trader can I get tax exemption on various intraday taxes(STT,Service tax, cess etc) under Startup India or any other scheme of GOI?


    The Entrepreneurship programme launched by the Government is oriented to encourage innovation and new product development. Trading in equity markets do not qualify for such incentives. I have not come across any other government scheme that has been initiated to help traders in markets either.

  • R


    The Finance Minister has allowed professionals to file returns under the presumptive tax regime. For a professional with gross receipts of say Rs 50 lakh in a year, he can take 50% or Rs 25 lakh s income and pay the tax as per his applicable slab rate. Is the 50% presumptive income is on the higher side?


    Every profession has its own share of expenses and overheads. It may be difficult to form a general opinion on the reasonability of the 50% limit allowed by the Bill for the professionals. But, considering the disparity between businesses and professionals, introduction of presumptive taxation for professionals is a great move. At 50%, in my opinion, professionals should not be complaining.

  • V


    want to know the exact moto of leving excise duty on gold jewellery by one % is that to shut the exsisting 80% of unorganised sector and that to shut the art of making jewellery by poor gold smith and help the corporates to rule the market and make all the poor goldsmith to work under them is that fair to make these poor goldsmith to feel like living as slaves pls put some light on my veiw


    While the exact objective of the government behind this move cannot be ascertained, in my opinion, this move should affect both the corporate as well as the unorganized sector equally.