CHENNAI: The middle class, particularly techies, government employees and the monthly salaried class investing in systematic investment plans and mutual funds expressed shock over the reintroduction of tax on capital gains.
Stockbrokers and equity investors in Chennai said the share market would now undergo corrections, as the investors will think twice before investing.
The announcement of the long-term capital gain on equity investments saw the Sensex plunge 1 per cent within minutes. However, the markets seem to have recovered immediately signaling that equity investors including mutual fund investors would absorb these blows and keep investing as per their financial objectives. After all, equity remains one of the best-performing asset classes, said Adhil Shetty, CEO and Co-founder Bank Bazaar.
“The introduction of tax on long term capital gain may be a dampener for stock markets. Overall, we hope that this budget will aid in consolidating the reforms and steering the economy in the right direction,” said M.S. Sreedhar, MD and CEO, Royal Sundaram General Insurance Company Limited. The proposed National Health Protection Scheme is a timely move to not only make health insurance accessible but also offer wider coverage to manage critical illness. These initiatives would usher in a new era for the under penetrated general insurance industry, he added.
“The gains from equity share held up to one year will remain short-term capital gain and will continue to be taxed at the rate of 15 per cent and this announcement affected the intra trade on Thursday,” said stock analyst P Logesh, based in Chennai.
Usually the budget encourages working women and enhances the income tax slabs but this year there is no such tax benefits for working women, said C.L. Usha, a government school teacher in Kancheepuram.
