The proposal to cut STT and rationalise stamp duty to give a boost to the sagging stock market is welcome. The STT introdoced in 2004-05 budget has several benefits and can emerge as a leveller of the marketfluctuations and a source of recurring revenue to the exchequer without any inflationary implications. The revenue earned through STT at Rs 2223 crores this fiscal may appear less and lower than the expectations, this can be attributed to the volatility seen in the market due to the poor performance of the domestic and international economy.STT can be used as a tool to contain volatility and excessive speculation.STT should be different for purchase and sales,individuals and institutions,various cut off limits,equtuity and bonds,Govt securities of different maturities, Gold and silver,Forex etc.It should emerge as an administrative tool to regulate the various markets in Financial System, replace capital gains tax over a period.The need to retain STT is essential but with changes.
Dr.T.V.Gopalakrishnan
( This appeared in The Hindu-Business Line on 27/09/11).
Showing posts with label common people. Show all posts
Showing posts with label common people. Show all posts
Tuesday, September 27, 2011
Abolition of Security Transaction Tax -A blunder
The move of the capital market division of the Finance Ministry to abolish the STT is not in the interests of the economy. This tax introduced through 2004 budget has been fetching easy revenue, non inflationary in caharacter and sparing the aam aadmi. It is basically affecting those who with their surplus income enter the capital market with a basic motive to save and speculate.Investors and brokers cannot ever favour such tax as their greed and clamour to curry favour from the Govt for all concessions and reliefs at any cost have always been considered, heard and adhered to. In case the Govt yields to this demand and abolish the tax the loss is substantial and it will be difficult to reintroduce at a later date. This tax needs to be reformed to emerge as an important administartive tool to regulate the capital market from the angle of controlling excessive speculation, volatility, raising recurring revenue without any inflationary implications, removing all other taxes like stamp duty, capital gains etc. The approach to abolish STT is only shortsightness and the Govt will repent later on. This levy needs to be made more dynamic and should vary from transactions to transactions.This tax should be different for retailers and whole salers based on certain cut-off limits,for individuals and institutions,for FIIs and domestic investors, equty, bonds and commodities, forex,etc. This will eventually lead to have a track of events in Financial market.
Dr.T.V.Gopalakrishnan
(This appeared in Et dated 27/09/11).
Dr.T.V.Gopalakrishnan
(This appeared in Et dated 27/09/11).
Thursday, September 15, 2011
Dividend and Income Tax.
Link to the article in ET is here.
It is time dividend earned beyond a cut off limit of Rs 1 crore and above should be brought under Income Tax net. A salary income of Rs 1.80 lakh is taxed. Out of this income, the person has to maintain family, take care of medical expenses, education of children and all sorts of expenses which include bribing to get small things done. It is difficult to understand Indian Taxation policy. Those who earn very high income beyond the imagination of ordinary people silently enjoy and talk of morals and ethics. politicians and bureacrtas who make unaccounted money enjoy life at others cost and advise people to lead a simple life with high thinking. They also liberally quote Bhagavat geetha, Ramayana and Gandhian thoughts for people to follow. It is time for industrialists to voluntarily contribute for common peoples' welfare as the money they earn by way of dividend is in a way public money. Make education free as far as possible and see that common people do not struggle to lead a life having atleast two time ordinary meals. With inflation ruling high, poor people have no means to survive.There is no moral, economic and social justification to exempt dividend from Income Tax under the name of double taxation. Taxation policy and the implementation of the policy have done maximum damage to our economy and the people. Will the authorities have the conscience to compare the tax and income of the Rich and the Ordinary taking into account the inflation factor and the living standards?
It is time dividend earned beyond a cut off limit of Rs 1 crore and above should be brought under Income Tax net. A salary income of Rs 1.80 lakh is taxed. Out of this income, the person has to maintain family, take care of medical expenses, education of children and all sorts of expenses which include bribing to get small things done. It is difficult to understand Indian Taxation policy. Those who earn very high income beyond the imagination of ordinary people silently enjoy and talk of morals and ethics. politicians and bureacrtas who make unaccounted money enjoy life at others cost and advise people to lead a simple life with high thinking. They also liberally quote Bhagavat geetha, Ramayana and Gandhian thoughts for people to follow. It is time for industrialists to voluntarily contribute for common peoples' welfare as the money they earn by way of dividend is in a way public money. Make education free as far as possible and see that common people do not struggle to lead a life having atleast two time ordinary meals. With inflation ruling high, poor people have no means to survive.There is no moral, economic and social justification to exempt dividend from Income Tax under the name of double taxation. Taxation policy and the implementation of the policy have done maximum damage to our economy and the people. Will the authorities have the conscience to compare the tax and income of the Rich and the Ordinary taking into account the inflation factor and the living standards?
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