Fintotal News Analysis | FM Showers Reforms
FM Showers Reforms
Ruby Jacob, 21 Sep 2012

Tax payers and the markets have a lot to cheer about. In a slew of reforms announced today the finance minister has brought investment in equity mutual fund and ETFs under the much awaited Rajiv Gandhi Equity Savings Scheme (RGESS).

RGESS will give first time investors in equities, with income less than Rs 10 lakhs, tax rebate of 50% on investments of up to Rs 50,000 made in stocks, equity mutual funds and ETFs. This is to encourage investors to choose equities over unproductive assets like gold.

That's not all; households have reason to cheer too. Taxes on non-subsidized LPG cylinders have been done away with. No customs duty and excise duty will be charged on domestic cooking gas cylinders. The finance minister called upon states to share the recently announced subsidy burden on LPG cylinder and diesel price hike. Already several congress-ruled states including Kerala and Delhi have decided to provide 9 LPG cylinders at subsidized price to below poverty line families. Bihar's Nitish Kumar had announced reduction in VAT on diesel.

Finance minister Chidambaram has also reduced withholding taxes on overseas commercial borrowings to 5% from the existing 20%. Indian companies that borrow via ECBs, FCCBs and foreign loans will be benefited. This is certainly big news for corporate, especially those heavily burdened with debt.

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