Basic income tax exemption limit of Rs 2.5 lakh may be raised in Budget 2022: KPMG survey - Business Guardian
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Basic income tax exemption limit of Rs 2.5 lakh may be raised in Budget 2022: KPMG survey



Basic income tax exemption limit, which currently stands at Rs 2.5 lakh, is likely to be raise in the Union Budget 2022-23, according to a pre-budget survey conducted by KPMG.

“On the individual tax front, most respondents i.e. 64 per cent expect an enhancement in the basic income tax exemption limit of Rs 2.5 lakh,” KPMG said in the survey report.
When asked about the most anticipated change for individual taxpayers, 29 per cent wanted that the government to enhance the income limit of Rs 10 lakh at which the maximum marginal rate of 30 per cent tax is triggered, while 36 per cent hoped for an increase in the 80C deduction limit of Rs 1.5 lakh.

A small number of respondents i.e. 19 per cent are expecting an increase in standard deduction limit of Rs 50,000 for the salaried class, while 16 per cent expect tax-free allowances/ perquisites for salaried individuals keeping in mind work from home arrangement – provision of internet connection/ furniture/ ear-phones, etc.

KPMG in India’s pre-budget survey conducted in January 2022 has tried to capture the expectations of important stakeholders on various tax aspects of the budget. Nearly 200 respondents across sectors participated in the survey, KPMG said.

Nearly 52 per cent of respondents feel that the faceless assessment scheme led to improved quality and efficiency in the assessment process.

Commenting on the findings of the survey, Rajeev Dimri, Partner and National Head of Tax, KPMG in India said “our pre-budget survey indicates that relief for individual tax payers by way of an enhancement in the basic income tax exemption limit of Rs 2.5 Lakh is highly awaited. Respondents also support an upward revision in the top income slab of Rs 10 lakhs, and an increase in the existing section 80C deduction limit of Rs 1.5 lakh.”

“Although the Government has taken several measures to resolve tax disputes and overhaul the tax dispute resolution framework over the past few years, further measures in this regard may help in reducing litigation. A rationalisation of TDS and TCS provisions to ease compliance burdens will also be welcome,” said Dimri.

On the compliance side, there has been a significant increase in the scope of TDS and TCS provisions over the past few years. 86 per cent of respondents believe that the scope of TDS and TCS has led to increased compliance burden on taxpayers.

Currently, Indian branches of foreign companies are subject to corporate tax at 40 per cent. With the Government reducing headline corporate tax rate for domestic companies from 30 per cent to 22 per cent starting from financial year 2019-20, the gap between the rates applicable to foreign companies and domestic companies has widened. 49 per cent of respondents believe there is a need to reduce the rate applicable to Indian branches in line with the 2019 rate cuts, in order for India to remain a globally competitive investment jurisdiction.

The Survey also found significant support for the Government’s Production Linked Incentive Scheme (PLI) applicable for the telecom, pharmaceuticals, steel, textiles, food processing, white goods, IT hardware and solar sectors. Most respondents felt that this scheme would help India become a key manufacturing hub, and a whopping 83 per cent of respondents favoured an expansion of this scheme to cover other sectors.

About 72 per cent respondents felt that the government should extend the date of commencement of production beyond 31 March 2023 for new manufacturing companies intending to avail of the concessional 15 per cent tax rate given the impact of the pandemic.

On the transfer pricing front, a significant majority of respondents expect the safe-harbour regulations to be rationalized in order to provide tax certainty to both taxpayers and tax administrators. 73 per cent of respondents believe that the Government should come up with detailed guidance on highly litigious transfer pricing issues like marketing intangibles, cost contribution arrangements, benchmarking of loans/guarantees, IP restructuring etc.

From a GST audit perspective, a significant proportion of respondents 41 per cent stated that they have started receiving audit notices, the report said. (ANI)


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Markets to track geopolitical events in holiday-shortened week: Analysts



Geopolitical events, macroeconomic data, and quarterly earnings of corporates would guide the stock market in a holiday-shortened week ahead, analysts said. Stock markets will remain closed on Wednesday for Ram Navami.

“This week promises to be crucial for the market as fresh worries about a potential conflict between Iran and Israel emerge. Any significant escalation in tensions could trigger panic selling and volatility in global equity markets. The market will also be closely monitoring the movement of crude oil prices, which are often impacted by geopolitical events,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Investors will be watching for earnings reports from Infosys, Bajaj Auto, and Wipro later in the week, he said. On the macroeconomic front, China’s GDP data, US retail sales figures, and movements in the US bond yields and the dollar index will be important factors influencing market sentiment, Meena added.

Shares of TCS will remain in focus on Monday. The company reported its January-March quarterly earnings on Friday. The IT services major logged a 9 per cent growth in net profit at Rs 12,434 crore in the fourth quarter of FY24 due to strong domestic business even as the company struggled in its key markets overseas. In the entire fiscal year, the Tata Group company’s net profit surged 9 per cent to Rs 45,908 crore, while the revenue went up to Rs 2,40,893 crore from Rs 2,25,458 crore a year ago.

“The outlook for the market will be guided by the major global and domestic economic data, India’s WPI inflation data and WPI manufacturing data, China GDP growth rate, US manufacturing production and US initial jobless claims,” Arvinder Singh Nanda, Senior Vice President, Master Capital Services Ltd, said.

Retail inflation declined to a five-month low of 4.85 per cent in March mainly due to cooling food prices, inching towards the Reserve Bank’s target of 4 per cent, according to official data released on Friday. India’s industrial production growth accelerated to a four-month high of 5.7 per cent in February 2024 due to good performance of the mining sector, showed the government data released on Friday.

“Investors are closely monitoring Q4 earnings and geopolitical events, which are poised to shape market direction,” said Vinod Nair, Head of Research, Geojit Financial Services.

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said, while the Indian economy is on a firm footing, the spate of negative news, especially from the global front, would at times halt the Indian equities’ upward march.

Stock markets were closed on Thursday on account of Eid-Ul-Fitr. Last week, the BSE benchmark Sensex dipped marginally by 3.32 points after a record-breaking rally. The benchmark had settled at an all-time high of 75,038.15 on Wednesday. It had reached the lifetime peak of 75,124.28 on Tuesday.

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Sensex soars above 75,000 for first time, but expert warns of correction ahead



The Indian stock market continued its upward trajectory on Friday’s session, with the Nifty reaching a new high of 22,775.70 points, surpassing its previous record of 22,768 points. The Nifty closed at 22,753.80 points, while the Sensex ended 0.47% higher at 75,038.15 points. All major indices, including Nifty Midcap, Nifty Bank, Nifty Next 50, and Nifty Financial Services, closed in the green.

The Nifty Midcap 100 index also hit an all-time high of 50,443.15 points, closing at 50,380.40 points. Sanjiv Bhasin, Director at IIFL Securities, predicts that the market may touch the 85,000 mark by the end of the year, but warns of potential sharper corrections in the coming months. He attributes the current market highs to the reforms implemented during the Modi government’s tenure over the last decade.

Dhirendra Kumar, CEO of Value Research, emphasizes the significant contribution of reforms to the stock market and the economy, attributing the journey to the remarkable milestone of 75,000 to digitization. In broader market movements, the BSE MidCap index outperformed, gaining 0.7%, while the SmallCap index registered a 0.3% increase. Among the Nifty 50 stocks, 32 closed in the green, with Coal India emerging as the top gainer. Globally, European markets experienced an uptick fuelled by positive developments in the technology sector and rising commodity prices.

Investor focus is now directed towards forthcoming inflation data in the United States, offering insights into the Federal Reserve’s monetary policy stance. Despite mixed global cues, the Indian stock market witnessed healthy buying across sectors, supported by expectations of rate cuts, healthy corporate earnings, and political stability post the Lok Sabha elections. Technical analysts suggest that the Nifty may target the 22,850-23,100 zone, with strong support expected in the 22,350-22,500 zone in case of profit-taking.

However, market participants are advised to plan their positions cautiously amid stock-specific volatility triggered by the beginning of the earnings season.

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BSE market capitalization soars past Rs 400 trillion mark amid record-breaking Nifty and Sensex



The market capitalization of BSE-listed companies hit a historic milestone, surpassing Rs 401.10 trillion on Monday morning, driven by a remarkable rally in equities. This marks the first instance of BSE-listed companies crossing the coveted Rs 400 trillion mark, fuelled by the 30-share BSE Sensex scaling its lifetime peak.

The Sensex benchmark surged by 425.62 points, reaching a new record high of 74,673.84 in early trade. This surge propelled the market capitalization of BSE-listed firms to an unprecedented Rs 4,01,16,018.89 crore ($4.81 trillion).

This achievement comes on the heels of the market capitalization hitting the Rs 300 trillion mark in July last year. Notable gainers from the Sensex basket included Mahindra & Mahindra, Maruti, Tata Steel, Bajaj Finserv, Power Grid, Reliance Industries, Axis Bank, and JSW Steel, while Wipro, Nestle, HDFC Bank, and Bajaj Finance lagged behind.

In the global context, Asian markets witnessed mixed performances, with Seoul and Tokyo trading positively, while Shanghai and Hong Kong quoted lower. Wall Street ended on a positive note on Friday.

Meanwhile, Foreign Institutional Investors (FIIs) injected Rs 1,659.27 crore into equities on Friday, as per exchange data. Additionally, the global oil benchmark Brent crude witnessed a 1.36 percent decline, settling at $89.93 a barrel.

Indian benchmark indices soared to all-time highs during the trading session, with the Nifty touching a peak of 22,697.30 and the Sensex reaching 74,869.30 points. By the end of the trading session, the Nifty closed at 22,666.30, up by 152.60 points, while the Sensex closed at 74,742.50, surging by 494.28 points.

Market experts like Ajay Bagga attribute the bullish trend in Indian markets to domestic inflows, strong macroeconomic indicators, and expectations of policy continuity. Sector-wise, Nifty Auto, Nifty Realty, and Nifty Metal witnessed notable gains, while the Nifty PSU Bank index experienced a decline.

Globally, equities saw an upward momentum as oil prices retreated from recent highs, and European stocks displayed mixed performances. The surge in spot gold prices to a new record high at USD 2,353.80 an ounce indicates investor interest in safe-haven assets amidst market uncertainties.

The unprecedented milestone in market capitalization reflects the resilience and optimism in the Indian equity market, driven by both domestic and global factors.

Furthermore, the rally in auto stocks was fueled by positive growth in auto sales, as reported by the Federation of Automobile Dealers Associations (FADA), indicating a sustained recovery in the sector. The broader market witnessed a mixed trend, with the BSE MidCap index edging up by 0.26 percent and the SmallCap index experiencing a slight decline of 0.06 percent.

Sector-wise, Nifty Auto surged over 2 percent, followed by gains in Nifty Realty (up 1.32 percent) and Nifty Metal (up 1 percent). However, the Nifty PSU Bank index saw a decline of 0.86 percent.

Globally, equities displayed upward momentum as oil prices retreated from recent highs. European stocks showed mixed performances, with the STOXX 600 up by 0.05 percent, Germany’s DAX rising by 0.38 percent, and the UK’s FTSE 100 slightly lower by 0.19 percent. In the US, S&P 500 futures and Nasdaq futures dipped by 0.2 percent.

Spot gold reached a new record high at USD 2,353.80 an ounce, reflecting investor interest in safe-haven assets amid market uncertainties. The recent surge in oil prices due to geopolitical tensions eased following progress in truce talks in the Middle East, contributing to Brent crude’s decline to USD 90.20 a barrel.

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Stock Markets brace for Holiday shortened week amid Global cues



According to analysts, global trends, macroeconomic data releases, and the commencement of the earnings season will be the primary factors influencing equity markets during a shortened trading week due to the observance of Eid-Ul-Fitr, which will result in market closure on Thursday. Additionally, market direction will be influenced by the trading behavior of foreign investors, trends in the rupee-dollar exchange rate, and movements in crude oil prices.

“Indian companies are set to enter a new corporate earnings Q4 season this week. Leading the pack is IT services giant TCS, set to kick off the earnings season for the quarter ending March 2024.

“Its results for the fourth quarter of FY24 will be announced on April 12, 2024, after market trading hours. Apart from that India’s industrial production data will also be announced on 12th April 2024. On the same day, inflation for March will be declared,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Investors will closely monitor the movement of the rupee against the dollar, crude oil prices, and investment activities of Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs), Meena added.

Last week, the BSE benchmark climbed 596.87 or 0.81 percent. It hit an all-time high of 74,501.73 on April 4.

“The outlook for the market will be guided by major global and domestic economic data, India’s CPI data and IIP, US consumer inflation, US business optimism index, US initial jobless claims and ECB (European Central Bank) interest rate decision,” Arvinder Singh Nanda, Senior Vice President, of Master Capital Services Ltd, said.

Ajit Mishra, SVP – Technical Research, Religare Broking Ltd, said this week marks the beginning of the earnings season and the focus will be on the IT majors to start with.

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4 of top-10 valued firms add Rs 1.71 lakh crore to mcap; HDFC Bank, LIC lead gainers



Four of the top 10 most valued firms witnessed a notable surge in their market capitalization, collectively adding Rs 1,71,309.28 crore. Leading this upward trend were HDFC Bank and the Life Insurance Corporation of India (LIC), emerging as the top gainers in line with the overall positive sentiment in the equity market. Conversely, six companies within the top 10 pack experienced a combined decrease of Rs 78,127.48 crore in their market valuation, with Reliance Industries being the primary contributor to these losses.

During the week, the BSE benchmark index climbed by 596.87 points or 0.81 percent, reaching an all-time high of 74,501.73 on April 4. Among the gainers from the top 10 firms were Tata Consultancy Services (TCS), HDFC Bank, State Bank of India, and LIC. Meanwhile, Reliance Industries, ICICI Bank, Bharti Airtel, Infosys, ITC, and Hindustan Unilever faced declines in their market valuation.

HDFC Bank witnessed a significant increase of Rs 76,880.74 crore, reaching a valuation of Rs 11,77,065.34 crore, while LIC added Rs 49,208.48 crore, bringing its valuation to Rs 6,27,692.77 crore. TCS observed a rise of Rs 34,733.64 crore, reaching Rs 14,39,836.02 crore in market capitalization, and State Bank of India’s valuation increased by Rs 10,486.42 crore, reaching Rs 6,82,152.71 crore.

On the other hand, Reliance Industries experienced a decline of Rs 38,462.95 crore, reaching Rs 19,75,547.68 crore in valuation. Bharti Airtel saw a decrease of Rs 21,206.58 crore, reaching Rs 6,73,831.90 crore, and ICICI Bank’s valuation dropped by Rs 9,458.25 crore, reaching Rs 7,60,084.40 crore. Infosys’ market valuation declined by Rs 7,996.54 crore to Rs 6,14,120.84 crore, ITC’s valuation dipped by Rs 873.93 crore to Rs 5,34,158.81 crore, and Hindustan Unilever’s mcap decreased by Rs 129.23 crore to Rs 5,32,816.81 crore.

Reliance Industries maintained its position as the most valued domestic firm by market valuation, followed by TCS, HDFC Bank, ICICI Bank, State Bank of India, Bharti Airtel, LIC, Infosys, ITC, and Hindustan Unilever.

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Sensex and Nifty soar to record highs led by private banks and IT



On April 4, domestic stock indices, the Sensex and the Nifty, rebounded from intraday losses to close higher, bolstered by gains in private banking and technology stocks. The Sensex surged by 350.81 points or 0.47 percent to reach 74,227.63, while the Nifty climbed 80.00 points or 0.36 percent to settle at 22,514.70. Market breadth favored gainers, with around 2,337 shares advancing, 1,352 shares declining, and 115 shares remaining unchanged.

Earlier in the day, both indices had achieved all-time highs, with the Sensex hitting 74,501 and the Nifty reaching 22,619.

Analysts at ICICI Securities recommended investors to capitalize on quality stocks during dips ahead of the earnings season. They expressed optimism, projecting a gradual ascent of the Nifty towards 22,900 in the upcoming weeks. The index’s recent healthy retracement is seen as setting the stage for the next upward movement.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, anticipated a period of consolidation in the market in the coming days, with a focus shifting towards fourth-quarter results. Vijayakumar highlighted expectations of positive results particularly in sectors such as autos, capital goods, telecom, and select pharmaceuticals. Financial sectors are also anticipated to report robust results, despite potential net interest margin (NIM) compression. However, he cautioned that the information technology sector might witness tepid results, emphasizing that management commentary will be pivotal.

Meanwhile, broader markets saw gains, with the Nifty Midcap 100 and Nifty Smallcap 100 indices rising by up to 0.5 percent. India VIX, a measure of market volatility, declined over a percent to 11.2.

Sector-wise, Bank Nifty, which holds significant weightage in the benchmark Nifty, surged by over a percent, driven by strong performance from HDFC Bank. Conversely, Nifty Oil & Gas emerged as the worst-performing sector, weighed down by ONGC and Oil India. This downturn followed the Indian government’s announcement of a fifth increase in windfall tax on petroleum crude to Rs 6,800 a metric tonne from Rs 4,900 since February.

Looking ahead, market focus shifts to the Reserve Bank of India’s (RBI) monetary policy decision on April 5. Market experts anticipate a status quo in key rates, with the majority expecting the Monetary Policy Committee (MPC) to maintain its policy stance of withdrawing accommodation. Any alteration in the RBI’s stance will be closely monitored, with implications for potential rate actions. Other factors such as inflation trends, liquidity measures, and GDP growth targets will also be scrutinized.

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