Tax Proposals

Unlike recent Budgets, this year most taxpayers are in for a pleasant surprise with rationalisation of rates and slabs, which reduce the effective tax burden. In balance, it's a mixed bag

In annual economic report, the government predicted that economic growth would pick up to 6.0% to 6.5% in the fiscal year beginning April 1

A set of proposals for capital gains tax on shares acquired without paying the Securities Transaction Tax (STT) is creating nervousness in the stock markets. The government has asked for reactions to be sent by the coming Tuesday.Legal experts say the wording of the draft notification could expose employee stock options (ESOPs) and off-market share purchases to capital gains.According to the circular's Clause (B), acquiring any listed company's shares other than through a recognised stock exchange would attract capital gains.Although ESOPs are commonly considered subscriptions, several judgments delivered by courts have highlighted that these are purchases made by employees in fthe orm of services rendered to the company. Also, allotment of ESOPs doesn't take place on a stock exchange platform. Hence, ESOPs would attract Clause (B). "If the intention is not to tax ESOPs, there should explicitly be an exception in the final circular," said Amit Singhania, partner, Shardul Amarchand ..