Newsletter July 2019

Good Afternoon, hope you are well. 

This month our newsletter will cover the following:-

1. Summary of the Budget, presented by our first full time Woman Finance Minister, Mrs. Nirmala Sitharaman;

2. Tips on how all investors can achieve more success investing;

3. Interview extract with Chief Investment Officer - Kotak MF, Equity.


The Budget gives us a broad outline of the direction the Government would pursue to hit the Trillion Dollar Economy Target.

Positives: -

The Budget has laid emphasis on the following sectors:

1.      Developing infrastructure

2.      Strengthening the Banking and Infrastructure sector

3.      Attracting foreign investments

4.      Promoting start-ups and entrepreneurship

All of the above is great and if implemented well, should result in the Government achieving its objective.

Negatives: -

Levy of a surcharge of 3% on income above Rs.2 crores and of 7% on income above Rs. 5 crores to take the effective tax rate to 42.74%.

To understand why this is a negative, one must understand that in FY 2017-18 only 6.84 crore persons (includes individuals, companies, LLP's, OPC's, partnerships and others) filed their income tax returns, out of an eligible population of 73.15 crore individuals and 0.12 crore active companies, LLP’s, one person and foreign companies.

That means only 9.33% of the taxable population filed income tax returns.

Assume 10% of this 9.33% actually have incomes above Rs.2 crore, which results in a tax increase for less than 1% of the taxable population. Would be interesting to check on how this would pan out over the fiscal year. 

Regards,

Om Soman

Make your money, work harder for you!

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Newsletter July 2019
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