- Date : 27/01/2023
- Read: 3 mins
Keep track of the upcoming Union Budget 2023 with a comprehensive analysis of the latest investor expectations, tax policies, and more. Stay informed and make sound decisions to maximise your investments.

Every year, the country eagerly awaits the Union Budget announcements. This year, the expectations and anticipation are further heightened after Finance Minister Nirmala Sitharaman issued a statement asserting that the upcoming Union Budget for the year 2023-24 will 'set the template for the next 25 years'. The Budget will be announced on February 1. Irrespective of what makes the cut and what doesn’t, the investor community, financial experts, as well as stakeholders have expressed their expectations from the Union Budget 2023. Let's go through some of these and how they are likely to impact the country.
Taxation across shares and securities
There has been growing disapproval over the tax disparities between investment securities. The Association of Mutual Funds in India (AMFI) highlighted the same in a pre-budget consultation with the Finance Minister held in November 2022.
The tax laws in the country currently favour Unit-Linked Insurance Plans (ULIPs) over mutual funds. ULIP gains are tax-exempt if the funds have been held for a minimum lock-in period of five years and the plan's sum assured is ten times its premium. Investors also do not pay taxes when they switch from one fund to another in a ULIP.
On the other hand, equity mutual funds are subject to Long-Term Capital Gains (LTCG) tax at 10% on profits exceeding Rs 1 lakh in a year. Additionally, long-term gains from debt mutual funds are taxed at 20% (plus indexation). Further, investors face tax liabilities when shifting between mutual funds. For instance, switching from a direct plan to a regular or a dividend to a growth plan will trigger capital gains. LTCG tax disparity also extends to debentures and debt funds. Listed debentures are taxed at 10% LTCG, whereas debt funds are taxed at 20% (plus indexation).
The holding period that determines the taxability of investments differs across shares and securities. The threshold period for LTCG tax is 12 months for listed debentures and 36 months for debt mutual funds. The holding period is 12 months for listed equity shares and mutual fund units and 24 months for unlisted shares.
Tax is one of the primary components of the Indian Budget, affecting all individuals. And the country is hopeful for uniform tax rules across asset classes.
Also Read: Facts You Should Know About The Union Budget 2023-24
Budget and markets
The Budget is expected to be growth-oriented, emphasising job creation and investments. There are speculations that there may be favourable tax announcements for the housing industry. Rural spending, Fast-Moving Consumer Goods (FMCG), Ministry of Micro, Small and Medium Enterprises (MSME), manufacturing, and banking are also expected to be some of the prime agendas for the Budget this year.
Also Read: Decoded: What The Youth Want From The Upcoming Union Budget 2023
Impact of the Union Budget on investors
There has been an influx of new-age investors post COVID-19. However, the varied tax laws are a cause of concern and hassles. Favourable changes in the taxation system can provide simplicity to taxpayers. It can also offer more disposable income in their hands, which can further increase their purchasing power and consumption.
Besides, job creation and investment growth can also benefit the middle class, which serves as the backbone of the economy. Infrastructural development can boost entrepreneurship and provide self-employment in the remotest of areas.
Sources:
- Moneycontrol.
- Livemint
- Mintgenie