Budget 2024: From removal of STT to crypto regulation, ICRA predicts these changes for markets, MFs and taxation
ICRA Analytics anticipates several potential changes in the upcoming Interim Union Budget for the fiscal year 2025. The Budget will be announced on February 1, 2024. Since the general elections will be held in May, this will be the Interim Budget and a new Budget will be presented in July.
1. Removal of security transaction tax (STT): According to ICRA, the markets have had this demand for removal of STT for a few years now and as the GST collection went up, this demand has again gained traction. The move, if considered, will attract more investors to invest in domestic equity markets.
2. Double taxation on dividends: The company pays tax on its profit and at the same time the government levies tax on dividends in the hands of shareholders resulting in double taxation on dividends. Thus, relief from double taxation on dividends will be appreciated by the markets.
1. Raising the minimum pension amount under APY: The rating agency also predicted that the government may consider raising the pension floor for the unorganised sector workers under its flagship scheme, the Atal Pension Yojana (APY), as the current amount may not attract enough potential subscribers to enroll.
2. Tax-free status to annuity income from NPS: Senior citizens rely heavily on annuity income during retirement years. Considering the rise in medical expenses for the financial well-being of senior citizens, ICRA believes that the government may accord tax-free status to annuity income from NPS. Also, an investment of ₹50,000 a year is unlikely to yield much pension and the limit may be enhanced to ₹1 lakh.
3. Separate tax deduction for life insurance premium: A separate tax deduction for life insurance premiums instead of clubbing it under Section 80C
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