Indian Union Budget Top 10 Highlights Points 2019

Top 10 Big Things About Indian Union Budget  2019

1. Income Tax hurting Ultra-Rich People(HNI) -: 

Income Tax  Rates Remains  Unchanged but surcharged in Income Tax has gone up for the high net-worth individuals. Surcharged has been raised by 3 percent for those earning 3crore to 5crore  a year and 7 percent for those earning Rs 5 crore and more which raised the effective tax to 39 percent in the Rs 2-5 crore bracket and 42.74  percent for 5 crores and above bracket.

2. Good Stocks At Cheaper Price :

The Finance Minister said the government will ask SEBI to raise minimum public float limit for listed firms from 25 percent to 35 percent. This will lead to a supply of papers of some very high quality, high PE Companies, which are now trading at high prices. So expect to get some of these stocks cheap.

3. Petrol and Diesel prices go up

The FM has proposed an additional excise duty and road and infrastructure cess of Rs 1 on every litre of petrol and diesel sold in the country. This will raise fuel prices but then oil prices have softened quite a bit from their high.

4. The Prices of Gold Goes up 

The FM increased customs duty on gold and other precious metals from 10 per cent to 12.5 per cent, which will make the precious metal more expensive . Shares of gems and jewellery companies fell sharply in response to the move. This may bring down physical demand for gold due to high prices.

5.Small Risk of Interest Rate Hike

Government is proposing to raise a part of its market borrowing from the offshore market, Governement borrowing is unlikely to put pressure on local bonds and thus interest rates . This may, in fact, help RBI continue the low-interest rate regime.

6. Bank Transaction Tax won't pinch you: 

The Finance Minister proposes to levy 2 per cent tax on cash withdrawal of over Rs 1Crore in a year . In order to encourage more digital and cheque payment which is transparent.

7. ETF another tax saving option

The finance minister announces plans to launch a CPSE ETFs on the lines of equity-linked savings scheme or ELSS which means you will be able to avail income tax deduction on the investment made in this ETF under Section 80 C of Income Tax Act 

8.Securities Transaction Tax Tweaked 

The FM streamlined the securities transaction tax or STT by Restricting it to only the difference between the settlement and strike prices in case of exercise of Options. This will be a relief for traders as now they won't have to be worried about compulsorily squaring off in the money options before expiry.

9.Reduction of Interest On Home Loans 

The FM allowed an additional deduction of up Rs 150000 on interest paid on home loans borrowed up to March 31,2020 for purchase of an affordable house valued up to Rs 45 lakh. So if you bought an affordable home, you get an income tax deduction on interest payment of up to RS 3.5 Lakh a year.

10 PAN & Aadhar Interchangeable

PAN Card and Aadhar become interchangeable for the convenience of taxpayers. Now those who do not have PAN card to file tax returns will be able to do so by quoting Aadhar number and use it wherever they require to use PAN.

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Concept Of Mutual Funds in Stock Market

What is Mutual Fund??

A Mutual Fund is a Financial Vehicle to mobilize money from investors, to invest in different markets and securities, in line with the investment objectives agreed upon, between the mutual fund and the investors. In other words, through investment in a mutual fund, an investor can get access to markets that may otherwise be unavailable to them and avail of the professional fund management services offered by an asset management company.

1.1.2 Role of Mutual Funds

Mutual funds perform different roles for the different constituents that participate in it. Their primary role of Mutual Fund in Financial Market is to assist investors in earning an income or building their wealth, by participating in the opportunities available in various securities and markets. It is possible for mutual funds to structure a scheme for different kinds of investment objectives. Thus, the mutual fund structure, through its various schemes, makes it possible to tap a large corpus of money from investors with diverse goals/objectives. Therefore, mutual funds offer different kinds of schemes to cater to the need of diverse investors. In the industry, the words ‘fund’ and ‘scheme’ are used interchangeably. Various categories of schemes are called “funds”. In order to ensure consistency with what is experienced in the market, this workbook goes by the industry practice. However, wherever a difference is required to be drawn, the scheme offering entity is referred to as “mutual fund” or “the fund”. The money that is raised from investors ultimately benefits governments, companies and other entities, directly or indirectly, to raise money for investing in various projects or paying for various expenses. The projects that are facilitated through such financing, offer employment to people; the income they earn helps the employees buy goods and services offered by other companies, thus supporting projects of these goods and services companies. Thus, overall economic development is promoted. LEARNING OBJECTIVES: After studying this chapter, you should know about:  Concept and role of Mutual Funds Advantages and disadvantages of mutual funds for investors Types of mutual fund schemes  A key development in the mutual fund industry over the years 14 As a large investor, the mutual funds can keep a check on the operations of the investee company, and their corporate governance and ethical standards. The mutual fund industry itself offers livelihood to a large number of employees of mutual funds, distributors, registrars, and various other service providers. Higher employment, income, and output in the economy boosts the revenue collection of the government through taxes and other means. When these are spent prudently, it promotes further economic development and nation building. Mutual funds can also act as a Market Stabilizer, in countering large inflows or outflows from foreign investors. Mutual funds are therefore viewed as a key participant in the capital market of any economy

Why are there different kinds of Mutual Fund Schemes?

Mutual funds seek to mobilize money from all possible investors. Various investors have different investment preferences and needs. In order to accommodate these preferences, mutual funds mobilize different pools of money. Each such pool of money is called a mutual fund scheme. Every scheme has a pre-announced investment objective. Investors invest in a mutual fund scheme whose investment objective reflects their own needs and preference.

 

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