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Old 19-06-2010, 09:08 AM
prasad prasad is offline
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Originally Posted by fiftyplus View Post
If you don't mind my saying so, ... I think we need to reread Chapter V (the chapter in question).

The para 1.5 refers to the original DTC in which STT was to be abolished.

The para 3.7 refers to the modifications suggested after inputs on the original.

This is how para 3 (page 17 as per document numbering) starts:


So the letter may not be entertained since the two paras are not "contra".

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Old 19-06-2010, 10:34 AM
fiftyplus fiftyplus is offline
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The nonsense continues...

How can we give feedback now when they say the details will be revealed in Parliament????

Ban gaya Banana Republic?

Look at this for typical nonsense (or maybe it is my stupidity):
Quote:
STT abolition,rate revision on the table

Final Call On I-T Slabs After Taking All Inputs: Pranab

Our Bureau NEW DELHI

THE securities transaction tax (STT),whose abolition has been a long-pending demand from investors, will be reviewed when the government overhauls the capital gains tax regime,a senior finance ministry official said.
The government could look at two options: scrap STT altogether or revise the existing rate.
We will take a call on STT after calibrating the capital gains tax,based on what is convenient to revenue.We are yet to decide whether to continue STT or if it should be merged with the capital gains tax, Central Board of Direct Taxes (CBDT) chairman S S N Moorthy said on Friday.
At present,investors who pay STT are exempt from capital gains when they sell their shares one year after holding them.The original code had proposed scrapping STT and levying capital gains tax,
The revised discussion paper on the code has,however,proposed retaining STT and adjusting it with the new regime on capital gains.The new regime will soften the tax blow for investors who sell shares after one year of holding them.The plan is to allow a deduction on the capital gains and add this to the taxpayers total income.The taxpayer would then pay income tax depending on the slab.Such a concession will not be available for shares sold within one year.
STT is proposed to be calibrated based on the revised taxation regime for capital gains and flow of fund to the capital market, the discussion paper said.
The fate of STT will hinge on the amount of deduction to be allowed on long-term capital gains.STT,introduced in 2004-05,is levied on transactions in securities markets.It is charged on purchase or sale of securities such as equity shares,derivatives,bonds and units in mutual fund schemes.The government had then linked STT to the capital gains tax regime.
Many proposals in the original code have been diluted to lower the tax burden for companies and individuals.Earlier in the day,finance minister Pranab Mukherjee said the government will take a final view on tax slabs after receiving all inputs.
The tax structure would be revealed in the legislation that is introduced in the Parliament.

This is the link but it may not work:
ePaper Lite - Times of India Publications

My comments:
  • Investors: Investors, in sensu stricto, prefer STT plus no LTCGT as is currently in force. Traders prefer no STT at all. So journos and drafters of legislation ought to get their terminology straight.
  • Merging STT with LTCGT or STCGT: How can STT which is being paid daily be merged with something paid annually or in each installment of advance tax?
  • Charging STT and LTCGT: The slime-b@lls want to get it both ways???
  • Soften what blow?: Long term can now be one day short of two years instead of 365+1 days. Where there was no tax there will be tax.
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Old 19-06-2010, 01:39 PM
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Originally Posted by fiftyplus View Post
...Long term can now be one day short of two years instead of 365+1 days.

This is the stupid-est part Don't think the 'long term' is defined in this idiotic manner anywhere else in the world.
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Old 19-06-2010, 02:09 PM
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Originally Posted by kkseal View Post
This is the stupid-est part Don't think the 'long term' is defined in this idiotic manner anywhere else in the world.

There was something similar proposed in DTC I regarding indexation to prevent debt funds from exploiting (and stupidly advertising) "double indexation benefits" on FMPs and the likes.

And the saddest part is that one cannot expect any (intelligent) discussion in Parliament.

It appears that the market will vote with its feet. When?

And some of the commentary is also amazing: previously, LTCGT was zero. DTC I proposes it to be taxable at your slab. DTC II proposes some tinkering on the downside. So DTC II has been hailed as a relief (over DTC I forgetting that LTCGT is currently zero). This is bordering on child psychology.
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Old 20-06-2010, 09:04 AM
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Maybe it's time to resort to "black humour" and to say that we know all the time that the Government just wants to EET our money!

Another, possibly unintentionally hilarious suggestion for dealing with the new taxes proposed on equity investments is given here: sell equity when you retire. You'll be in a lower tax-slab and hence save tax. Wow! This dovetails well with the "invest for the long term" mantra of fund managers.

What follows assumes 50% deduction for computing capital gains:
Quote:
For example, an investor who invests Rs.5000 per month for 10 years in an equity fund through SIP would receive an amount of Rs 11,09,650, assuming an annualised return of 12 percent. While as per the current tax laws, he would pay zero tax on the capital gains of Rs 5,09,650, under the DTC he will have to pay a tax of Rs 76,447 at the rate of 30 per cent on the reduced capital gains of Rs 2,54,825. The effective rate of tax would work out to be 15 percent.

The same investor can reduce his tax liability by investing for the longer term, say 20 years, so as to ensure that SIP gets completed after he retires. As the income levels generally go down after one retires, he could end up paying tax on the capital gains at an effective rate of 5 or 10 percent.

Link
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Old 20-06-2010, 09:29 AM
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And the proposal that to qualify as a long term investment, equity may have to be held for as long as a day under two years doesn't seem to have sunk in even for the much-respected Hindu Business Line.
Quote:
Under the revised code, capital gains arising on account of transfer of equity shares or units of an equity oriented fund held for more than one year will be computed after allowing a deduction at a specific percentage of capital gains without any indexation.

Source: How the revised tax code impacts you
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Old 30-08-2010, 11:18 PM
prasad prasad is offline
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DTC bill introduced in parliament on 30-08-2010.

http://220.227.161.86/20300dtc2010a.pdf
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Old 30-08-2010, 11:58 PM
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Originally Posted by prasad View Post
DTC bill introduced in parliament on 30-08-2010.

http://220.227.161.86/20300dtc2010a.pdf

Sir jee! Million thanks
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