Budget 2014 Analysis: Deficit Skepticism Is Justified, Big Targets for 8 months (Premium)

No Comments » Written on July 14th, 2014 by
Categories: Budget2014, Premium

Budget 2014-15 has, to markets at least, been a bit of a disappointment. However, that is more about mismatched expectations, rather than a botched budget. What the government’s doing, at least on paper, is to bring the fiscal deficit down to 4.1% of GDP by changing things here and there.


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Budget 2014 Eases Taxes Marginally

What you really want to know about the budget: How it affects your taxes. So here goes: Base Slab Upped by 50K to 250K Your income upto Rs. 250,000 is exempt. (Earlier, Rs. 200,000). If you’re above 60 years of age, the exempt limit is 300,000. Above that, in a progressive manner: 250K (or 300K) to 500K is 10% 500K …

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Budget 2014 Direct Tax Summary: Almost Like There Was No New Government

The Budget Highlights are here, in a quick summary. We’ll warn you: it’s almost like there was no new government. We’ve seen some minor changes. What you care about Your taxes go down because of an increase of the base slab of 250K versus 200K (another 50K for senior citizens) An increased 80C limit on investments upto Rs. 1.5 lakh …

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The Murder of the Debt Mutual Fund By Closing a Tax Loophole

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  Invested in an FMP? Bought a Liquid Fund And Stuck around for a Year? Bought Debt Funds for the “Inflation Indexation”? You’re going to hate Arun Jaitley.   Let’s start with the basics. You can invest in a fixed deposit with banks. Which pays you interest. The interest is added to your income, and taxed at the highest rate …

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Cheaper Kindles, Chappals and Soaps, Pay More for Radio Taxis and Coke

We have seen indirect taxes change with the Budget, and here are the key changes: Consumer Goods Soaps get cheaper as customs duty on input chemicals is cut (Helps the FMCG companies like Godrej Consumer Products, HUL, Jyothy Labs) Lower end TVs (19” LCD or less, or CRT) will get even cheaper as input customs duties are exempted. (Mirc Electronics …

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Go Healthy: Tobacco Duty Hike of Upto 72%, Coke and Pepsi Get a 5% Tax

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It’s going to cost you a lot more to light up. The excise duty on cigarettes is up 72% for cigarettes less than 65 mm, and 11% to 21% on other cigarettes. Chewing Tobacco and Gutkha see rates go up 60% to 70%. Pan masala too goes up. This should have hit ITC hard, but the stock didn’t hurt much, …

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You Can Buy Only One House To Offset Capital Gains: Budget 2014

You can only buy one residential house with the capital gains you make, says the Finance Ministry, in the Budget. If you have capital gains from selling a house, you can now invest in only one house in India to avoid capital gains (only the amount invested in the house is exempt). If you have capital gains from any source …

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Capital Gains Bond Investment Loophole Plugged: Only 50 Lakhs Allowed to Offset Gains

One more tax loophole in Capital Gains has been bridged. Now, you can only invest your long term capital gain in certain bonds (54EC, like NHAI bonds) upto Rs. 50 lakh. Earlier, if you sold a house in, say November, you had six months to buy these bonds. Every financial year, you could only buy Rs. 50 lakh worth of …

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The 80CCD Confusion: Do You Get Another 100,000 Deduction?

There are many conflicting views on the budget. A certain section - 80 CCD - has been amended, clarifying that it is available to private sector employees as well. This has been taken many to believe that private sector employees can get an additional Rs. 100,000 if they invest in the New Pension Scheme (NPS). This is incorrect. I believe …

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Scathing Review, Cursed MF: Capital Mind’s Budget Pieces Elsewhere

Two of our articles have been published in Qz and Outlook. Here is some link love: Outlook: “Strong Mandate, Weak Budget” - a scathing review of the budget and the market’s response to it. Arun Jaitley’s first budget sends mixed signals to financial markets, and one strong message: this is not a dream budget. The dream budget, if you heard …

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Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion.

Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.

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About the Author:
http://www.capitalmind.in
The man behind Capital Mind. Deepak is a co-founder at MarketVision, a financial knowledge company. Deepak also provides data research and consulting services, and now lives in Bangalore. Connect with him at deepakshenoy@capitalmind.in.

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