Budget 2024: FM Should Address Froth Build-Up In Market, Says Saurabh Mukherjea
The move to tax short-term capital gains at 20% was a much-needed one, he said.
Finance Minister Nirmala Sitharaman presented a "common sense-oriented budget" on Tuesday, which focused on job creation and rural development, said Saurabh Mukherjea, founder of Marcellus Investment Managers.
He also said the move to tax short-term capital gains at 20% was a much-needed one. The finance minister increased the tax on short-term gains on some financial assets in the first budget since the formation of the coalition government. The long-term capital gains of financial and non-financial assets will now be taxed at 12.5%.
At the same time, the government raised the limit on the exemption of capital gains on some financial assets to Rs 1.25 lakh per year. Listed financial assets held for more than a year will be classified as long-term, Sitharaman said.
The government has also proposed to abolish angel tax for all classes of investors and reduce the corporate tax rate on foreign companies to 35% from the current 40%.
"I think she needed to take on this kind of froth that was building up in the market," Mukherjea told NDTV Profit. He further said that the Reserve Bank of India and SEBI have already been pointing out that there is "too much money" going into the markets but little going into the economy.
At the same time, Mukherjea pointed out that the Indian markets are still looking interesting. He said that there was no bull run in good-quality companies. "It is a good place and a good time to buy quality stocks," he said.
Mukherjea added that the finance minister has taken up the challenge of job creation and given a big allocation towards the development of rural India. "Full marks to the FM. It was a well-thought-through, common-sense-oriented budget."
As for corporate capex, he felt that the government had done everything possible. The companies now have a higher incentive to spend on capex instead of dividends and buybacks.
