About seven weeks after the?Union Budget 2023?was presented by Finance Minister Nirmala Sitharaman, the?Finance Bill 2023 was passed in the Lok Sabha today, i.e., on Friday.??
The?Finance Bill 2023 gives effect to the financial proposals of the central government for the financial year 2023-24 to be taken into consideration. FM Sitharman introduced 64 official amendments to the Finance Bill, which were tabled in Parliament on February 1 along with the budget proposals.
Following amendments, 20 new sections have been added to the Bill.?The Finance Bill will now be sent to the Rajya Sabha.
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Debt mutual funds, which have previously benefited from a tax break because long-term capital gains (LTCG) were taxed at 20% with indexation, will lose this benefit on April 1, 2023.??
Debt mutual funds will no longer enjoy long-term tax benefits if they invest less than 35 per cent of their assets in equities. The amendment in the Financial Bill 2023 stated: ¡°Specified mutual fund means a mutual fund by whatever name called where not more than 35 per cent of its total proceeds is invested in equity shares of the domestic companies.¡±
¡°An arbitrage is being created right now where interest income from debt mutual fund (where not more than 35% invested in shares in domestic company) is not distributed and converted into long term capital gains of 20% (with indexation). In some case it comes to even less than 10% due to indexation. Thus many taxpayers are able to reduce their tax liability through this arbitrage,¡± the Finance Ministry explained.?Income from debt mutual funds that invest up to 35% in equity shares of domestic companies will be taxable at applicable rate since income from equities in such funds do not constitute interest income.
The government is?raising the Securities Transaction Tax (STT) on futures and options contracts in the stock market from April 1, 2023, and changes to this effect were brought into the Finance Bill cleared by the Lok Sabha today. Options contracts will now attract 0.021% STT, up from 0.017% earlier, and futures will attract a levy of 0.0125%, up from 0.01%.
While moving the bill for passage and consideration, FM Sitharaman also announced the setting up of a committee under the finance secretary to look into pension issues for government employees.?"I propose to set up a committee under the finance secretary to look into this issue of pensions and evolve an approach that addresses the needs of employees while maintaining fiscal prudence to protect the common citizen. The approach will be designed for adoption by both the central and state governments," the minister said.
She also said the Reserve Bank of India will look into the payments made through credit cards for foreign tours that escape tax at source, as per the PTI report.??
"RBI is being requested to look into this with a view to bring credit card payments for foreign tours within the ambit of LRS and tax collection at source there on," she announced.
While the House was taking up the bill, several opposition members were in the well, raising slogans and holding placards and demanding a probe by a JPC into the allegations against the Adani group of companies?following a report by US-based short seller Hindenburg.??
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