Budget 2020: Could tax reliefs be in the offing? Here's what the market is saying

Days before what may be a critical budget and at a time when country is nationwide protests against Citizenship Amendment Act (CAA) and National Register of Citizens (NRC), re are heavy expectations from finance ministry this year. Amid chaos in country and ahe of budget on February 1, market analysts are buzzing with expectation over three key tex reforms. 

2020 Budget, which will be presented by Finance Minister Nirmala Sitharaman, is being pegged as one that will have to serve dual purposes of driving industry investment, and also increasing consumption.

three key expectations of markets are:

Long-Term Capital Gains Tax (LTCG)

After a gap of 14 years,  Long-Term Capital Gains Tax (LTCG) was re-introduced by late Finance Minister Arun Jaitely in his budget during 2018-19. According to market analysts, government should eir scrap LTCG or extend period for investments for over two years to boost ecomy. Capital gain is any profit that is received through sale of a capital asset. re are two s of capital gains tax- short term and long term. 

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Dividend Distribution Tax

According to reports, market experts are expecting changes in Dividend Distribution Tax (DDT). According to m, tax can be scrapped to stop multiplicity of taxes for companies, but it will be taxable for receiver for benefit. 

A dividend is a return that is given by company out of total profits that it earns in a year. DDT is levied on dividends that are distributed by companies who are making a profit. It is considered as an ditional tax that is levied on company which is alrey paying a tax. Currently, along with income tax, Indian companies are paying a 20 to 21 per cent DDT.

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Personal tax relief

Amid ecomic slowdown, market experts are expecting a cut in personal income tax in order to boost ecomy and spur consumption. However, some experts argue that reducing personal income tax will hit exchequer. Tax relief is an incentive that lowers tax which is owed by an individual or, as was case with recent corporate tax cut, a company. 

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Centre's GDP estimate for 2019-20  

According to  first vance estimates released by Centre on January 7, India's real GDP (Gross Domestic Product) growth during financial year 2019-2020 is expected at 5% as compared to last year's 6.8%. This estimate is in line with Reserve Bank of India's (RBI) own revised estimate in December. ecomy grew by 4.5%, lowest in six years, in second quarter (July-September) of this fiscal in weakening from previous quarter's 4.8 per cent.

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