Who wrote this article?

Deepak Shenoy, Capitalmind's research team.

Budget 2008: Short Term Cap Gains Up, Service Tax Extras and Relief

29 Feb 2008Deepak Shenoy1 min read

Quick Facts

What is "Budget 2008: Short Term Cap Gains Up, Service Tax Extras and Relief" about?
What category is this article in?: Economy
Who wrote this article?: Deepak Shenoy, Capitalmind's research team.
When was this article published?: Published 29 February 2008.
How long does this article take to read?: 1 min read
What topics does this article cover?: Budget
What does the "Short Term Capital Gains Tax up to 15%" section say?: The FM has rationalised this by saying it needs to be equal to dividend distribution tax, and to promote longer term investing.
What does the "STT will be a business expense, and Introduction of CTT" section say?: Securities Transaction Tax is no longer an advance tax, it's a set off against income, as a business expense. Doesn't affect the salaried, only those that file business income returns.
What does the "Stock Exchanges, Clearing houses, AMC services to ULIPs to pay service tax" section say?: Earlier, these services were out of the service tax net. Now they're in. Meaning you will probably need to pay a wee bit more on your transactions on stock exchanges. And please, for heaven's sake, don't buy ULIPs.
What does the "Banking Cash Tax OUT the door" section say?: I don't know who ever paid this tax, but they don't have to pay it any more. So withdraw as much cash as you like. Just make sure it's in your account first.
What does the "Service Tax limit up to Rs.10 lakhs" section say?: Nice for small companies like ours or for startups who are renting offices for less than 10 lakhs a year. You don't need to pay service tax until your turnover crosses Rs. 10 lakhs.
What does the "Additional Rs. 15K off for Medical Insurance" section say?: If you pay it for your parents.

Short Term Capital Gains Tax up to 15%

The FM has rationalised this by saying it needs to be equal to dividend distribution tax, and to promote longer term investing.

STT will be a business expense, and Introduction of CTT

Securities Transaction Tax is no longer an advance tax, it’s a set off against income, as a business expense. Doesn’t affect the salaried, only those that file business income returns.

On the lines of STT, a tax called Commodities Transaction Tax will be paid by commodity traders

Stock Exchanges, Clearing houses, AMC services to ULIPs to pay service tax

Earlier, these services were out of the service tax net. Now they’re in. Meaning you will probably need to pay a wee bit more on your transactions on stock exchanges. And please, for heaven’s sake, don’t buy ULIPs.

Banking Cash Tax OUT the door

I don’t know who ever paid this tax, but they don’t have to pay it any more. So withdraw as much cash as you like. Just make sure it’s in your account first.

Service Tax limit up to Rs.10 lakhs

Nice for small companies like ours or for startups who are renting offices for less than 10 lakhs a year. You don’t need to pay service tax until your turnover crosses Rs. 10 lakhs.

Additional Rs. 15K off for Medical Insurance

If you pay it for your parents.