Good morning! In today's newsletter, we dissect some of the key decisions of Budget 2024, the changes in property taxes mean for home buyers and investors, the stock market's reaction to the Budget and more!
#LatestNews⚡️
Budget 2024: These stocks stand to benefit from FM Nirmala Sitharaman's announcements
Titan stands to be a clear winner as Finance Minister Nirmala Sitharaman has proposed a significant reduction in basic Customs duties on gold, silver, and platinum, as part of the Union Budget 2024-25, say analysts rooting for an improved outlook for the jewellery maker.
Another firm on analysts’ list is ITC, in which they expect sustainable growth as the government has left tobacco taxes unchanged. While Sitharaman has said the prime focus of the Budget 2024 is to promote employment and skilling, provide support to MSMEs, and empower the middle class, here’s what brokerages make of what it means for the industry.
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Four of the five most traded stocks on budget day were PSUs
The Indian equity market had an extremely volatile session on Tuesday (July 23). Union Finance Minister Nirmala Sitharaman's 90-minute-long speech saw Nifty50 decline nearly 2% and paring much of its losses before the close. The day has been one of the busiest days ever for the NSE and stocks worth ₹1.7 lakh crore were traded on a single day!
Interestingly, public sector undertaking (PSU) stocks featured among the most traded stocks on the bourse in value terms. While the largest private lender HDFC Bank tops with a turnover of ₹4,222 crore, the next four ranks go to the state-owned firms. The list comprises Hindustan Aeronautics, Rail Vikas Nigam (RVNL), Indian Railway Fin Corp (IRFC). and Indian Renewable Energy (IREDA).
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Budget 2024: What changes in property taxes mean for home buyers
Budget 2024 introduced significant changes in capital gains taxation across different asset classes, with notable adjustments in property taxes. The government has reduced the capital gains tax rate on long-term capital gains from 20% to 12.5%. This sounds like great news, right? However, there is a twist. While the tax rate has been cut, the government has removed the indexation benefit.
What is indexation? Indexation adjusts the purchase price of an asset for inflation, thereby reducing the gains and ultimately the tax liability. Additionally, the finance minister clarified that property values indexed up to 2001 are grandfathered for capital gains purposes. This means that the removal of indexation benefits will not apply to properties held before 2001, which will continue to enjoy these benefits.
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#TechTalks📱
At ₹ 84.16 crore, HCLTech’s C Vijayakumar becomes highest paid Indian IT CEO for FY24
HCLTech CEO C Vijayakumar’s remuneration for the fiscal year 2024 zoomed 190.75 percent YoY to around ₹ 84.16 crore, making him the highest-paid among Indian IT services companies’ CEOs for the year.
Second to him is Infosys CEO Salil Parekh, who drew around ₹ 66.25 crore, followed by Wipro’s new CEO Srini Pallia who got a remuneration package of around ₹ 50 crore. TCS CEO K Krithivasan’s maximum basic salary is about ₹ 1.9 crore annually.
According to HCLTech’s annual report which came out on July 22, Vijayakumar earned a base salary of around $1.96 million (₹ 16.39 crore), a performance-lined bonus of $1.14 million (₹ 9.53 crore), around $2.36 million (₹ 19.74 crore) was paid in long-term incentive (LTI) cash component and $4.56 million (₹ 38.15 crore) in LTI – perquisite value of the RSUs (restricted stock units) exercised and a remaining $0.04 million in benefits, perquisites and allowance – totalling to $10.06 million.
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Budget 2024: ₹1.28 lakh crore allocated for telecom projects, major boost received by BSNL
The central government has proposed to allocate ₹1.28 lakh crore for telecom projects and public sector firms under the Department of Telecommunications, with most of the funds going to state-owned BSNL.
Out of the total allocation, over ₹1 lakh crore is designated for BSNL and MTNL expenses, including ₹82,916 crore for BSNL's technology upgrades and restructuring. "The total net allocation for this demand in the Budget Estimate (BE) 2024-25 is ₹1,28,915.43 crore (₹1,11,915.43 crore plus ₹17,000 crore). The additional ₹17,000 crore will come from the Universal Service Obligation Fund (USOF) and be used for schemes like Compensation to Telecom Service Providers, Bharatnet, and Research and Development," the budget document stated.
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#UNIONBUDGET2024🗞️
#StartupsWorld🌎
Budget 2024 | Angel Tax abolition a big boost for Indian startup ecosystem
Big news for Indian startups, the contentious angel tax has been abolished for all tax classes! The announcement was made by Finance Minister Nirmala Sitharaman in her budget speech today.
During the Budget presentation, the FM said, "To bolster the Indian startup ecosystem and boost the entrepreneurial spirit and support innovation, I propose to abolish the so-called angel tax for all classes of investors."On this announcement, Padmaja Ruparel, Co-founder of IAN FUND, said, “This is truly awesome. And thank you Finance Minister for listening to the startups and investors. This will bring a huge impetus to the growth of our startups.”
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Rail minister highlights increased safety and infrastructure investments
Ashwini Vaishnaw, Minister of Railways and IT discussed the government's increasing investments on safety and infrastructure in railways in a post-budget discussion on CNBC-TV18. He also shared his view on the potential impact of the reduction in angel tax on the startup ecosystem.
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#ExpertsTake💡
Union Budget 2024 | Why it has a progressive approach to growth
The Union Budget for FY 2024–25, presented by Finance Minister Nirmala Sitharaman on Tuesday, showcased the Modi government’s commitment to balancing high capital expenditure with robust welfare spending. This balanced approach is poised to maintain a robust rate of GDP growth while keeping the fiscal deficit in check.
Despite global economic uncertainties, including elevated asset prices, political instability, and shipping disruptions, India's economic growth remains a beacon of stability. The global economy, though performing better than expected, is still grappling with these challenges. However, India’s inflation remains low and stable, moving towards the 4% target, with core inflation (non-food, non-fuel) currently at 3.1%. The government’s proactive steps to ensure adequate market supplies of perishable goods have also contributed to this stability.
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