Advisor Speak

Acche din aa gaye kya?


In a nutshell

  1. Leading IFAs from across India have given their verdict on the Budget: 7.5/10. No change in LTCG on equities, no increase in service tax on commissions, reduction in corporate tax for small companies to 25% - these are seen as the key positives.

  2. Business sentiment among IFAs is upbeat - they can clearly see incremental flows from investors coming into mutual funds - some IFAs expect the next couple of years to be their best ever. RIA proposals pushed to the back burner means sharp focus now on business development and making the most of a conducive market environment.

  3. For IFAs earning more than 10 lakh income (and certainly for those earning more than 50 lakh of income), who haven't yet corporatized their business, there now is a clear tax advantage of doing so, apart from giving you options to use that corporate structure at some stage for RIA compliance, if need be.

  4. Bottom line: acche din aa gaye kya for IFAs?

Lovaii Navlakhi, International Money Matters, Bangalore

Overall Budget rating: 7/10

Implications for investors:

1. LTCG on property after holding period of 2 years -- positive per se; could lead to over supply

2. Limiting loss on house property let out to Rs. 2 lakh per year: will dissuade investing in property for rental income

3. Income tax modifications will result in lower tax for income upto Rs. 50 lakh pa; and higher for those with income > Rs. 50 lakh pa.

Implications for business:

1. Reduction in income tax to 25% for those with income < 50 cr: positive

2. Moving to financial assets from real estate - positive

Hemant Rustagi, WiseInvest Advisors, Mumbai

Overall Budget rating: 8/10

Implications for investors:

Positives- Status quo for LTCG, Service tax unchanged, arbitrage funds as well as those funds that have arbitrage in the portfolio composition continue to enjoy tax benefits of equity funds, government's focus on infra, affordable housing and rural India as well as fiscal deficit of 3.2 percent will boost the markets and keep interest rate low. Negatives: No change in 80 C limit and interest on housing loan limits their capacity to invest more.

Implications for business:

Since we have a corporate structure, 5 percent cut in tax will allow us to allocate more money into the business. Besides, no change in the service tax is a relief.

Brijesh Dalmia, Dalmia Advisory, Kolkata

Overall Budget rating: 7/10

Implications for investors: Positive - didn't touch LTCG in equities

Implications for business: Neutral to positive

A K Narayan, Chennai

Overall Budget rating: 8/10

Implications for investors: Clients are happy that they have moved to debt and balanced funds little early based on my inputs. They are happy with sip and stp method of investing. They are upset tax slabs not moved up as expected. Also they wanted 80c to give more relief which did not happen. Also no relief for city based house purchasers

Implications for business: As far as business is concerned it looks brighter and prospects are far more attractive than what it was year ago. Global situation is certainly a case for worry for all.

Sanjeev Govila, Hum Fauji Initiatives, Delhi

Overall Budget rating: 9/10

Implications for investors: No shocks, no big moves, directionally right, not too populist, fiscally sensible, focused spending in growth areas. Should lead to good growth of industries. Stricter on those still employing evasionary tactics for taxation.

Implications for business: Very upbeat on business environment. Ethical and clean businesses should flourish.

Vishal Dhawan, Plan Ahead, Mumbai

Overall Budget rating: 8/10

Implications for investors


1. Lower than expected net market borrowing and fiscal deficit to continue to aid interest rates moving down

2. Shift from physical assets to financial assets continues with changes in laws of set off of rent and TDS on rent

3. No news on capital gains on equities continues to provide tax arbitrage for equities


1. Chance to bring in ease of business lost, by lack of any meaningful labor reform

2. Corporate tax rate cuts missing

Implications for business


1. Lower tax rate on MSMEs to boost profitability

2. Shift towards financial assets to aid growth

3. Service tax rates unchanged


1. No impetus to REITs

Siddharth Shah, Ahmedabad

Overall Budget rating: 7/10.

Main sentiment: no negative is positive.

Biggest miss: No follow through announcements to curb black money post demonetization.

Implications for investors: No change in tax on equity is a big relief for investors

Implications for business: No change in service tax is a relief.

Conditions for our business are very favourable. I believe FY17-18 can be the best year of my career.

Pramod Saraf, Swan Finance, Indore

Overall Budget rating: 4/10

Implications for investors:

Positives :

1. Reduction in Corp tax rate will motivate structural corporate culture.

2. Reduction in tax rate for individuals will increase investing power by marginal amount.

3. LTCG tenure reduction to 2 years will motivate and reduce the individuals waiting time to monetise and invest the sum in financial instruments.

Negatives :

1. Additional tax as surcharge over 50 lakh income will shell out additional money as tax.

2. Disappointment over no change in 80C limit.

Implications for business:

Positives :

1. Controls declared over cash spending will increase investable surplus of investors.

2. Reduction in corporate tax rate will allow to motivate for more dividend to shareholders in turn increase their investable surplus.

Negatives : No negatives.??

Shifali Satsangee, Agra

Overall Budget rating: 6/10

Implications for investors:

Reduction in LTCG holding period for property to 2 years and change in base rate for indexation are positive. Can create flow of funds to invest in markets

1. Reduction in corporate tax for small companies +ve for many clients

2. Professionals to pay advance tax now in a single instalment - short term funds investment opportunities

No change in tax for non corporate entities - disappointment for many investors

Implications for business:

Growth focus, clarity on taxation to spur investor sentiment - positive for equity flows

See strengthening trend of shift in allocations from property to equity markets: industry growth can accelerate

Ramesh Bhat, Aniram, Chennai

Overall Budget rating: 8/10

Implications for investors:

1. No change in Long Term Capital Gains on Equity Mutual Funds and Stocks is really a breather

2. Long Term Capital Gains on Sale of House reduced from 3 Years to 2 Years is a welcome move

Implications for business: No major Negative. Very Positive Budget

Amit Kumar Mehta, Jamnagar

Overall Budget rating: 8/10

Implications for investors: Reduction in tax rate for 5 lakh slab positive; 80C limit not raised is a disappointment

Implications for business: No change in service tax until GST is a short term relief; PSU divestment through ETFs is a disappointment due to lack of revenue for distributors

Sandeep Gandhi, Rajkot

Overall Budget rating: 8/10. There is no major negative and clearly we feel that the Government is very much focussed and Govt spending itself can bring cheers in the economy.

Implications for investors: There are window dressing kind of changes in income tax exemption limits. But it may result in more individuals being induced to file income tax returns and willing to pay little taxes also. There is feel good type of opinion by the investors.

Implications for business: Business has to boom, as tier III cities and lower middle class people will like to file the returns, which especially opens up the market for all instruments falling u/s 80C. The frequent changes in the MF investments laws is breaking the speed!!

George Joseph, Bangalore

Overall Budget rating: 5/10

Implications for investors:


Reduction of holding period for LTCG to 2 years

No change in service tax to align it with GST

Push to digitisation of cash flows by reducing cash payment limits

Change of reference year for LTCG to 2001

Relief to tax payers below 5 lakhs

Doubt: Clarity required on new capital gains bonds

Implications for business: Reduction in corporate tax for MSEs to 25%

Mohsin Bijapuri, Chennai

Overall Budget rating: 6.5/10

Implications for investors:


Reduction in income tax slab though marginally.

No tinkering with Service tax & LTCG

Reduction in Capital gains holding period on residential property,

NPS commutation of 40% being made tax free & Annuity to nominee becoming tax free


IT reforms could have been broad based.

Budget belied expectations of softness.

Annuity still is taxable

Implications for business:

LTCG retained for equity

No tinkering with service tax as of now.

Raj Talati, Vadodara

Overall Budget rating: 8/10

Implications for investors:

Positive : It has been clarified through policies that govt. is committed to clean the system from Black money menace. It will in turn help the financial assets in big way, which will result both Debt and Equity market to give above average returns.

Negative : Post demonetisation people at large was expecting some big tax sops and considerable changes in I.T.Slabs for the pain they have taken. The extra money given in the hand of tax payer is very minuscule. Which is a bit disappointing for them.

Implications for business:

Only negative I could see is because of implementation of GST, service tax rates will go up..... But apart from that everything is BIG positive. We can see our business growing like never before in next 2-3 years.

L.Sridharan, Ultimate Investments, Bangalore

Overall Budget rating: 5/10

Implications for investors:

No major break-through kind of announcements in the budget. I feel it is neutral and a non event. One major positive for Real estate owners is coming in the form of reduced duration for LTCG to 2 years, another good is no change in the LTCG for Equities.

Implications for business: Status quo

S.K. Bagaria, Kolkata

Overall Budget rating: 8/10

Implications for investors: Positive for investment 1. Fiscal deficit in control, 2. Focus on infrastructure 3. Growth for rural economy being booster for demand.4. No major freebies , hence no burdon on exchequer

Implications for business: Good, because nothing negative . Also good because of better investment climate

Rajesh Chheda, Finance Factory, Panjim

Overall Budget rating: 8.5/10

Implications for investors: Not much of a change. If your clients goals have not changed, their investments don't require a change.

Implications for business: Future is bright

N. Krishnan, Value Invest, Chennai

Overall Budget rating: 8/10

Implications for investors: There is no negative perspective, only positive. Main positives are no negative surprise on taxation. Well focused fiscal numbers

Implications for business: Corporate tax at 25% is a positive

Rajesh Dhruva, Keynote Consultancy, Rajkot

Overall Budget rating: 8.5/10

Implications for investors: Xllent possibility of economic growth which can post handsome gains in Equity funds

Implications for business: Higher AUM

Ramesh Hegde, Davangere

Overall Budget rating: 9/10

Implications for investors: Most of our clients are invested in real estate in early phase, now they got opportunity to dispose them with indexation benefit as well as tax benefit and same may be invested in financial assets.

Implications for business:

a) Tax saving benefit.

b) Scope for more investments in financial assets.

c) No major changes in corporate sector , and made clear all the cloud of news, now we expect lot from the market.

Veena Malgaonkar, Pune

Overall Budget rating: 8/10

Implications for investors:

Fortunately, Capital Gains on equity was not included

Emphasis on agricultural and rural development

Tax rates fallen, except for the Super rich

Implications for business:

Debt is likely to become less attractive

Corporate tax rate - as we are full cheque income - has been cut to 25%

Jignesh V Shah, Surat

Overall Budget rating: 9/10

Implications for investors:

1) End of confusion about capital gain tax

2) More allocation towards infra sector boost overall economy including housing sector

3) More transparency in Political Donation and cash transaction limit turned in to less corruption

4) Continued on path of fiscal consolidation without compromising on public investment and inflation figures.

5) Economy going towards organised sector , Very Good for overall.

6) More disinvestment of Govt.or public sector through ETF and merger of oil sector provide more investment avenue to the client.

7) Over all Very Good budget with Road maps and priorities of Govt. for Growth. for everybody. Rural population,Youth,For poor ,Infra, Financial Sector,Digital economy,Public Service,Fiscal Management and Tax Administration

8) No negative is Very Big positive .

Implications for business:

1) Economy moving towards more white money means Very Good Growth in Financial assets.

2) In Future Mf investor base is going to widen, very good for us.

B. Ramanan, Wealth Creators, Coimbatore

Overall Budget rating: 8/10

Implications for investors: Capital Gains untouched on equities are positive. No negatives. Yet to see the fine print of it.

Implications for business: Yet to read fully the fine print of it. Overall it seems to be positive only.

Kanak Jain, Kolkata

Overall Budget rating: 9/10

Implications for investors: Reduction in corporate tax for companies below 50 cr to 25% is a positive

Implications for business: IFAs will see more inflows from customers due to tax saving and surpluses parked in banks due to demonetization

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