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Post Budget Analysis 2018-19: Markets to remain strong in the wake of earnings growth coming back - IndiaNotes.com
Post Budget Analysis 2018-19: Markets to remain strong in the wake of earnings growth coming back
Way2wealth | Published: 02 Feb, 2018  | Source : IndiaNotes.com

Highlights:


Overall the budget commentary was tilted in favour of the rural economy with an aim to increase income in the hands of the farmers and addressing iob creation Through measures in various employment generating industries.

 

The government did its best to keep accounts healthy with deficit shoot-up being balanced with higher than estimated disinvestment targets. The government stated that the impact of demonetisation & the implementation of GST has been challenging but green shoots of revival in the economy flowed in from Q2 with GDP recording 6.3% growth. The trickle down impact of the same in FY] 9 is expected to be limited.


The major announcement was introduction of LTCG tax on equity shares & equity oriented MF’s at lO% on gains above 31 lakh without allowing the benefit of any indexation. However, all gains up to 3lstJanuary, 2018 will be grandfathered. For example, if an equity share is purchased six months before 31 stJanuary, 2018 at ii 00/- and the highest price quoted on 3lstJanuary, 2018 in respect of this share is 31 20/-, there will be no tax on the gain of QO/- if this share is sold after one year from the date of purchase. However, any gain in excess of TQO earned after 31st January, 2018 will be taxed at lO% if this share is sold after 31 st July, 2018.


Introduced tax on distributed income by equity oriented mutual fund at the rate of lO%.


We expect the FII’s to re-enter over the next few months with an improvement in the investment cycle and demand revival


We advise investors to be patient with the government initiatives and at the same time be mindful of the global challenges. We expect markets to remain strong in the wake of earnings growth coming back. Long - term investors should enter the markets in a staggered manner to make the most 0 f the market correction and invest in value stocks.

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