|
FINANCE
 The
stock market welcomed the Budget with the removal of all Direct
Tax Surcharges for Corporates and Non-Corporates to the tune of
RS 2,951 crore. The 1.5% reduction in Interest rate for PFs and
small savings is expected to reduce the attractiveness of Bank Fixed
deposits and equities might attract more funds. Consequently the
Banks are expected to bring down their lending rates, which means
projects will become less risky and production costs will drop.
This should prompt new investments.
Reduction in Tax payable on dividends will bring back debt funds
into limelight. The proposal to deduct TDS on income from interest
if it exceeeds RS 2,500, will make debt-oriented mutual funds more
attractive than Bank deposits. Another positive impact of reduction
in tax rate would be an increase in the disposable savings in the
hands of the investor.
The housing finance industry has been given a boost by increasing
the deduction towards interest payment from RS 1 lakh to RS 1.5
lakh for self-occupied houses. This sector has been earmarked for
repeated incentives as the construction industry serves as a catalyst
for industries such as cement and steel. The main beneficiaries
out of this will be the housing finance institutions.
TOBACCO PRODUCTS
Tobacco Industry has been slapped with a surcharge of 15% on cigarettes
to replenish the National Calamity Contingency Fund, following
which stocks of tabacco companies like ITC, VST Industries and
Godfrey Philips took a beating, and are likely to decline
further.
GEMS AND JEWELLERY
The Indian Gems and Jewellery Industry, which is predominantly
export-oriented, has got a shot in the arm, by the announcement
of a cut in import duty from 35% to 15% on cut and polished gemstones.
The Industry can now import gems, use them in jewellery and re-export,
thereby adding value through design.
MEDIA
Foreign television channels have finally come into the Indian tax
system. Earlier these channels were levied a flat 'deemed profit'
tax of 10% of the revenue generated in the country. This will now
be replaced by the levy of income tax as applicable to corporates.
Foreign broadcasting companies have established Indian companies
that sell airtime and outsource production of programs. These Indian
companies have always been subjected to normal tax provisions. Their
foreign-based principles which do the broadcasting and generate
revenues from selling airtime to advertisers will also now come
under the same tax regime.
For the film industry the FM has announced a reduction of customs
duty on Cinema projectors and other related equipment. This however
will benefit only the big producers who import such accessories.
The reduction has been effected from 25% to 15% on all imported
cinematographic cameras and other film hardware.
|
 |
| |
 |
|
