Special Live Trading Session: The Indian stock market will be opened for trading on Saturday. This is due to the announcement of Budget 2025 on February 1st. Accordingly, investors will be able to trade in market-related instruments in real time and in normal course. Market participants expect key revisions in Securities Transaction Tax (STT) and long-term capital gains (LTCG).
Special Live Trading Session On Saturday:
The notification of NSE said, "has announced live trading session in Capital Market segment on Saturday, February 01, 2025, on account of the Union Budget 2025-26."
It added, "All indices (real-time and end of day) shall be computed and disseminated as per the standard market timings on February 01, 2025 (Saturday). "
This will be the second time the Budget will be presented on a Saturday. The last time It was presented on Saturday was February 1, 2020.
The Budget 2025 will be the eighth Budget of Finance Minister Nirmala Sitharaman, making her the first FinMin to present the most number of Budget.
What Investors And Traders Seek From Budget 2025?
In a note, Mehta Equities said, "Honestly speaking, transaction cost in India is too high and LTCG and STT are seen as a sentiment dampener for the market. Way back in 2004, the security transaction tax (STT) replaced the long-term capital gains (LTCG) tax. Budget 2018 brought back LTCG, levied again at a rate of 10% on annual gains of over Rs 1 lakh but STT was not removed."
"The biggest positive trigger for Dalal Street in the upcoming Union Budget 2022 could be abolition of Securities Transaction Tax (STT). Investors will also want LTCG to be removed. This should give boost to the new investors who have started their investment journey in last 12-36 month," Mehta Equities added.
Mehta Equities cited that as requested also by ANMI, the government should provide tax exemptions of up to 1 lakh in STCG. At present, STCG on equity shares (listed), which have suffered STT, are taxed at 15 percent plus surcharge, without any tax exemptions like in the case of long-term capital gains (LTCG).
Furthermore, the brokerage said, short-term rm capital gains from equities are taxed at 15% while long-term capital gains over Rs 1 lakh are taxed at 10%. The government levies a 0.1% STT on each equity sale or purchase transactions on exchanges. Short-term capital gains on all other assets are taxed as per an individual's income tax slab, while long-term capital gains are taxed at 20% with indexation benefit.
What To Expect In Sensex, Nifty On Budget Day?
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services expects Budget - expectations and actuals - will influence the market on January 31 and February 1. He said, "Since we are going into the Budget without a pre-Budget rally, the probability of a rally, post Budget, will be high if the Budget delivers on growth stimulating initiatives like cuts in personal income tax. But it is important to understand that the impact of the Budget will last only for a few days, at best. The medium to long-term trend of the market will be dictated by GDP and earnings growth. Therefore, investors should look for cues on these crucial macro trends."
Further, Vijayakumar added, "Market is strongly reacting to results with good results being rewarded and poor results getting punished. This has spiked the market volatility. Fairly-valued high quality largecap financials continue to be a safe sector for investors."
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