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Moneylife Foundation seminar simplifies Union Budget 2013-14

Just three days after it was presented by finance minister P Chidambaram, Anil Harish and Vimal Punmiya delivered their engaging analyses on the budget. Several important points, gone unnoticed by media thus far, were discussed in detail by the speakers. Particular attention was paid to amendments related to real estate. Read on to find out what impact this budget will have on your life

At the 155th seminar of Moneylife Foundation, Anil Harish, a lawyer who specialises in matters related to real estate, informed a packed audience at the Bombay Royal Yacht Club, in south Mumbai, that India is one of the most difficult places to do business in. “India used to the 120th most difficult country to do business in, out of 155, 20 years ago. Today, we are 132nd. Builders may be doing a lot illegally, but they are right to complain about how hard it is for them to get permits,” said Mr Harish, a partner at DM Harish & Co.

Mr Harish believes that the government has not done much to improve processes and reduce corruption in the system. Instead, he said that several amendments to the Income Tax Act this year are unclear and could easily be misinterpreted. He said, “The finance minister said he was encouraging micro and small industries, but proceeded to give an investment allowance of 15% to those entities that invest over Rs100 crore in the “manufacture of any article or thing” in the next two years. It appears that a particular company or firm desired this allowance and managed to persuade the government. What makes this provision unclear is that even builders can claim to have manufactured an article or thing in constructing a building. They could have excluded real estate, but they haven’t. So a builder could fight for this investment allowance. This is sure to result in much litigation.”

Another ambiguous provision relates to the additional deduction of Rs1 lakh on home loans sanctioned in the current year. Mr Harish said, “The finance minister said that this will promote home ownership in a significant way. But I don’t believe this will be the case. Mainly this is because the benefit is not so substantial. The loan must be sanctioned in FY13-14, the loan must be of less than Rs25 lakh, the flat value must be no more than Rs40 lakh. Remember that it says ‘value’. So the I-T department may not care about what you’ve paid for the flat. The department will go by the stamp duty valuation. There’s sure to be much controversy over this matter. Also, the finance minister said this is available to ‘first-home’ buyers, but this is nowhere written in the Bill. This again will lead to a controversy.”

One of the most draconian provisions announced, in Mr Harish’s opinion, was related to the amendment to Section 43CA. He said, “This will affect many people. This is because it requires both the seller and buyer to pay tax according to the Ready Reckoner value if the sale price is less than what the Ready Reckoner values at. This will surely cause problems. This is a very unfair law. We’re going back to the old days, it appears—when business was conducted either under the table or out of the country.”

Lastly, Mr Harish noted the areas the finance minister completely ignored. He said, “What did need attention was black money, corruption, scams, foreign accounts, exchange rate and employment opportunities. This was simply not addressed. But we must be thankful no estate duty was proposed.”

Vimal Punmiya, partner at Vimal Punmiya & Co, then proceeded to discuss matters not related to real estate. He began, though, by discussing his view of the Budget in general. “Nothing much has been done,” he said, “I was expecting the finance minister to propose a few taxes, but he didn’t. Mr Chidambaram usually does this. He will introduce several taxes. This time it was only one, the relatively minor commodities transaction tax. Largely, this is just an election budget. Either incentives were given or charges were announced. There was lots of talk about it, but not much has been given to either women or children.”

The need for reform has received much attention in the past few months. Mr Punmiya said, “Mr Chidambaram has announced a reform committee. I personally feel that this committee has the potential to do much good in the area of taxation. It can substantially reduce litigation.”

Mr Punmiya then informed the audience of the various benefits they are entitled to this year. He said, “You can claim a deduction of Rs2,000 if your salary is less than Rs5 lakh. Then, you can also now receive a deduction of 100% of the amount you donate to National Children’s Fund under Section 80G of the Income Tax Act. Usually, you get a deduction of just 50% of the amount you invest, as with the Prime Minister’s Office Fund.”

Like Mr Harish, even Mr Punmiya was glad that the estate duty wasn’t introduced. He said, “The finance minister had talked about bringing the estate duty back. This would have been devastating. At one point during the speech, I thought the estate duty was being brought back. But it wasn’t and for this I’m pleased. This would have taken us back to the 1980s.”

The seminar ended with an engaging Q&A session that lasted over half an hour.




4 years ago

Good knowledge is gained from such meetings. Keep it up and publish the important points brought out at such seminars.


Vinay Joshi

In Reply to hasmukh 4 years ago


What knowledge you gained from the meeting vis-à-vis my straight comments? to the Hon’ Speaker[s]. Had so? you should have answered my comments!?

This can be to comprehend; I’m putting it up for the forum & Moneylife.
[it is essential to read my post – 3days ago.]

The no frills budget analysis HAS NEVER EVER been, only Nani Palkhivala. There use to be a serpentine queue for general public from gate east, CCI.

His erudition was ‘TRUST’, who ratified the merits or otherwise [unlike present day speakers!]

It was more important than what FM has said, rather FM’s WAITED for his analysis!?

Mr. Nanabhoy [aka Nani] Palkhivala had started the tradition in 1958 at Greens Hotel, continued it for more than three decades.

It has given him an iconic status which, NEITHER the media or anyone can come closer.

He stopped in 90’s, ‘CACOPHONY’!? No point, his good sense, silence is golden.

I had asked for a reply from the Hon. Speaker [dispensation / comments at the said seminar], Mr. Anil Harish, Advocate, / Partner, D.M Harish & Co, a sixty year old reputed Law firm. He was there at ‘Legal Pundits’ conference in 2012. Yet not forthcoming.

Has he answered it? or Moneylife has not forwarded it to him? TO WHOM WAS IT INTENDED. NOW, I’m expanding it. Expecting answers, if any, without prejudice.

1] India ranks 132, who proliferates it?

2] If he wants construction industry to avail 100CR rebate, as per his admission will the industry be prepared to pay C.Ex Duty, Service Tax, VAT, SHOW SUCH INVESTMENTS!

Why can’t you state the ‘X’ Co. beneficiary?

DID HE EVEN ONCE REFER TO SIDBI? Other aspects I’m leaving it aside on MSME. WHAT does he know & stated?

4] On ‘Home Loan’ was he addressing ‘SOBO’ people or the ‘COMMON MAN’?
He is CALLING it ‘AMBIGUOS’ a provision, SILENT to state ambiguity!

5] Mr. Anil, when you plead & IT /Courts ask – READ – disputed value of immovable property – WHAT DO YOU PLEAD? WHAT IS STAMP DUTY VALUATION? IT IS BASED ON WHAT? HOW ‘IT’ [dept] TAKES CONCURRENCE?

WHY, have you not stated that a working couple can avail the benefit on 80L home loan?

6] Mr. Anil had dealt with sub-sec 3[iii] BUT IGNORANT of 3[iv] which states – ‘the assesses does not own any residential house property on the date of sanction of the loan’.


7] This doesn’t stop here – he further goes to state 43CA, seeked to be inserted draconian!?

What is ‘DRACONIAN’? He overlooks proposed sub sec [2][4][3], existing 50C[2][3][1].

8] No where its proposed that ‘Seller’ will have to bear “ANY” Tax for undervaluation.
How are sale deeds assessed?

9] He has ‘gaffed’ sec 56[2][vii][b] proposed [b] ‘property consideration’.

10] He “CALLS” 43CA draconian, not understood in which manner? But he wants to
‘justify’ his talk on ‘BLACK MONEY’, “CORRUPTION”, “FOREIGN ACCOUNTS”!

Such ‘self centered’ talks with the intention of ‘scare mongering’ is unsolicited for.

Well, it was ‘Moneylife’ perception to get to ‘decipher’ THE FINANCE BILL 2013.



4 years ago

TDS ON SALE OF IMMOVABLE PROPERTY SEEMS TO BE SIMILAR THAT OF BCTT (banking cash transaction tax) in the past, which was a failure one and subsequently withdrawn.


Vinay Joshi

In Reply to S BHASKARA NARAYANA 4 years ago

Mr.S. Bhaskara Narayana,

BCTT was not failure, a basic mopping up exercise, BANKS were not having electronic / computerized facilities in 2005 to feed data.It garnered a few thousand crores.

STT, same principle working fine, now, even with 60% - 80% reductions in equity & futures resp.

1% TDS aspect & recknoer value is to get/net wide base, economic principle.



Vinay Joshi

4 years ago

Hello Ms.Sucheta,

In the first place your byline Budget analysis is missing. If not you, Mr.Debashis should have!

Please forward this message to Mr.Anil for his valued replies solicited by me.
Ms.Soma is yet contemplating her reply, is different.

Getting the respected & honourable Gentlemen to deliver their Budget speech is TOTALLY & ABSOLUTELY DIFFERENT than what Mr.Nani Palkhivala use to deliver at Brabourne! OK.

Anyway I’m proceeding further,

Dear Mr. Anil Harish, Greetings!

Yes doing business in India rank 132, what are its component indicators, the proliferators!
How many shady things the multi-crore operators have which are in conjunction quashed?

Who pleads & manages on their behalf? The pleaders themselves know violation!?

Mr. Anil, a distinguished a person like you ‘MIXING’ like cement 100CR accelerated investment allowance! Oh! At the same, commenting, done for “ONE” co.!?

WHAT IS YOUR VISION FOR INVESTMENT & GROWTH? Ok, given for one co. [you’ll not name it] BUT it applies across the board? HAVE YOU FOLLOWED THE PROVISION?

A Harvard educated, Tam Chettiar, HAS STAKED his reputation TO WALK THE TALK!
The pragmatic & realistic budget in a complex situation, he should be congratulated.

OK, you want 100Cr investment rebate in construction, ACCORDING TO YOU, goods are manufactured / produced – ‘THEN BE PREPARED TO PAY EXCISE DUTY, SERVICE TAX & VAT’!

Further Mr.Anil, IF YOU HAVE NOT FOLLOWED, 100CR acceleration is in “PLANT & MACHINERY”, FOR enhancing the existing capacity, HENCE, ADDITIONAL INVESTMENT IN THE EXISTING MANUFACTURING FACILITY. [Brownfield project.]

Mr. Anil, tell me which developers have own equipments & THEMSELVES will INVEST further 100CR, FOR THE ONGOING PROJECT? AFTER 16/17 they will have to maintain the same ‘plant & machinery’ at the said project & CONTINUE TO MAINTAIN it for five years.

[clause 5 of The Bill, 32 IT Act [new sec] 1[a][b], sub sec2,]


Mr. Anil, on ‘Home Loan’ The Finance Bill 2013, EXPLICITLY STATES the provisions.

Clause 13 of the Bill seeks to insert a new section 80EE in IT Act, relating to deduction in respect of loan taken for residential house property.

Surprisingly Mr.Anil, you can delve on sub-sec 3[iii] BUT IGNORANT of 3[iv] which states – the assessee does not own any residential house property on the date of sanction of the loan.

Yes Mr.Anil, please answer, IS IT NOT STATED? OK, further why are you creating fear about 40L value & stamp duty valuation. Ready reckoner value is adopted value, WHAT’s the fuss about?

First & foremost – in which manner this transaction can come for scrutiny? Explain.

Mr.Anil, you’re wrongly interpreting & STATING DRACONIAN 43CA. Clause 8 of the Bill seeks to insert the new section, please go through proposed sub-secs [1][2][3][4], existing sec 50C [2][3]. NOTHING IS DRACONIAN!!? OK.

Mr.Anil, IF YOU CALL proposed sec 43CA DRACONIAN, I don’t think you are justified on talking about black money. What he wants to do on foreign accounts WAS EVIDENT on the day of Budget, on exchange rate HE CAN’t print $’s, hence seeking FDI/FII investments, & re: employment opportunities he has initiated steps in right direction. Read the text.


Nifty, Sensex will try to rally: Weekly Market Report

If the last week’s lows hold, the Nifty will attempt to cross 5,740 and then 5,770

The market declined over 2% in the Budget week as corporates and foreign investors were largely disappointed with the proposals announced by the finance minister on Thursday. While he made a clarification on the tax residency certificate issue on Friday, some other proposals are seen as a setback to foreign investments. Concerns about the twin deficits—current account and fiscal—also dampened sentiments.


The BSE Sensex declined 398 points (2.06%) to settle at 18,919 and the Nifty closed the week at 5,720, a fall of 131 points (2.23%). The market indices are down for the fifth week in a row. However, if the last week’s lows hold, the Nifty will attempt to cross 5,740 and then 5,770.


The market managed to close with minor gains on Monday amid high volatility on support from the IT sector. The benchmarks tanked over 1.5% on Tuesday on global concerns, which led to a broad-based sell-off in the domestic market. Optimism emanating from the Economic Survey that the government would be able to rein in the current account deficit led the market in the positive on Wednesday.


The lacklustre Union Budget which proposed higher taxes on corporates and individuals saw the market paring its early gains and crashing by over 2% from the day’s high on Thursday. The finance minister’s clarification soothed foreign investors, which helped the market close in the green on Friday.


BSE Consumer Durables (up 4%) and BSE IT (up 2%) were the top sectoral gainers in the week. The key losers were BSE Realty (down 9%) and BSE PSU (down 5%).


TCS, Infosys (up 3% each), Bajaj Auto (up 2%) and Wipro (up 1%) were the main gainers on the Sensex while Hindalco Industries (down 8%), Tata Steel, Reliance Industries, HDFC Bank (down 6% each) and Coal India (down 5%) were the major losers on benchmark.


The Nifty was led by TCS, Jaiprakash Associates, Infosys (up 3% each), Bajaj Auto (up 2%) and Wipro (up 1%). The top losers were Siemens (down 10%), Reliance Infrastructure (down 9%), DLF, Hindalco Ind and Punjab National Bank (down 8% each).


The much talked about Railway Budget, presented two days ahead of the Union budget, turned out to be largely a non-event. While sparing passengers from another hike within a month, Pawan Kumar Bansal, however increased charges for super-fast trains, and fees for ticket cancellation and reservations.


The pre-Budget Economic Survey for 2012-13, tabled in Parliament on Wednesday, projected a turnaround in the economy in 2013-14, with growth expected to be in the range of 6.1% to 6.7%, higher than the advance estimates of 5% growth in the current financial year. The improved growth, however, would be subject to a normal monsoon, further moderation in inflation, which should induce further relaxation of the tight monetary stance, and a mild recovery of global growth.


Finance Minister P Chidambaram, presenting his eighth Budget, did not have too many options before him. Corporates were miffed as he raised the surcharge on corporate tax to 10% from 5% for domestic companies, whose taxable income exceeds Rs10 crore per year, and raised the surcharge on dividend distribution tax to 10% from 5%. He also levied a 10% surcharge on persons earning above Rs1 crore a year.


India’s economic growth in the October-December period of the current financial year declined to 4.5% —the decade’s lowest quarterly growth.


In international news, US president Barack Obama on Friday ordered the start of $85 billion in government spending cuts, heralding a potentially decade-long wave of belt-tightening that is likely to impede US economic growth this year. The cuts total $1.2 trillion over nine years. Of that, $85 billion comes out of the budget for the remaining seven months of this fiscal year, making for effective reductions of about 13% for defence programs and 9% for non-defence programs.


Book Review: The Indomitable Investor

The importance of using authentic public information before making an investment decision

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