Must watch numbers in this Budget 2017

LTCG & STT : The long-term capital gains (LTCG) tax is something, which investors and traders will track closely in this Budget. Any tinkering with the tax rate could result in knee-jerk reaction.The long-term capital gains tax on equities is zero at present if held for a period of more than one year while the short-term capital gains tax continues to be at 15 per cent. Securities transaction tax (STT): STT on futures and options may rise for the second year in a row from the current level of 0.05 per cent for every 10 million trades, which will raise it for bigger transactions. Securities transaction tax (STT) has been a major factor in killing the depth of capital markets as it repels high-frequency traders.

Fiscal deficit: The economic survey was cautious on relaxing the fiscal consolidation path.The government may relax the fiscal deficit target to 3-3.5 per cent of GDP for 2017-18, which would create additional room for spending.

GAAR: The Central Board of Direct Taxes (CBDT) last week issued a fresh set of clarifications on the implementation of General Anti-Avoidance Rule, or GAAR, to allay investors' apprehensions about the norms. Expectations are that the government may announce additional details behind GAAR, which will be implemented starting April 2017.The latest clarification said if the jurisdiction of a foreign portfolio investor is finalised based on non-tax commercial considerations and the main purpose of the arrangement is not to obtain a tax benefit, GAAR will not apply. GAAR is aimed to cracking down on tax havens, making it harder to claim some tax exemptions, which some experts feel could get deferred.

Infrastructure spending: The infrastructure sector is expecting a big push from the Finance Minister in this Budget in the wake of the slowdown in the economy. The Economic Survey tabled in Parliament by the Finance Minister said India’s economy should grow between 6.75 per cent and 7.5 per cent in the financial year beginning on April 1, which was lower than Street estimates.The infrastructure sector is likely to get 10-20 per cent higher allocation, with projects aimed at improving roads & highways, shipping & ports, urban development and housing and poverty alleviation seeing greater thrust. In addition, the sector will look out for announcements on alternative sources of raising funds.Any development on the roads and highway sector would set on fire developer stocks such as Ashoka Buildcon, IRB Infra, IL&FS Transportation Networks (ITNL) and engineering procurement (EPC) players such as Sadbhav Engineering, PNC Infratech and KNR Construction.

Start Ups : Prime Minister Narendra Modi declared the setting up of an Rs 10,000 crore fund of funds to support start-ups under the aegis of a 'Startup India, Standup India' banner. The move was widely appreciated and was also showcased as the government's big effort to support entrepreneurship ecosystem in the country. Any Development by the government  would enable creation of 18 lakh jobs and that a 6X multiple factor (in terms of additional debt and equity investment) would make the fund's impact about Rs 60,000 crore.

Real-estate Sector: Prices could decline further as investing undeclared income in real estate becomes more difficult. The policy decisions of 2016 have left an air of uncertainty hanging in the real estate markets as scores of undecided potential home buyers are putting aside their decisions to purchase their dream homes. On taxation front, it is expected that the repayment towards principal part of the home loan should be taken out from section 80C of Income tax and made as a separate section for availing income tax benefits for borrowers. This will be above the present limit of Rs 1.5 lakh. While well intentioned, the current ruling brings very little cost advantage to the customer if you consider average real estate prices in Tier 1 and Tier 2 cities.

Corporate Tax: Market expects a good cut in corporate taxes and income taxes to alleviate the pain of demonetisation and spur consumption. Globally corporate tax rates have fallen from an average of 27.5% just 10 years ago to 23.6% today. corporate tax rate in India averaged 35% over last two decades.

Healthcare: Spending on healthcare has been consistently ignored by the successive governments.  India has one of the lowest health expenditure ratios in the world in terms of the government spending on health as a percent of GDP. This is lower than that of the low income countries as well. Any incentives or government Spending will benefit Healthcare Companies. In the last two budgets, while the absolute amounts have gone up, as a percentage of GDP, the expenditure has remained more or less stagnant.

Jewellery : The government, in Budget 2016-17, had proposed 1 per cent excise duty on jewellery without input credit or 12.5 per cent with input tax credit on jewellery excluding silver other than those studded with diamonds and precious stones.Any Development or changes in that front will be keenly Watched.

Other Things which needs to be watched out includes individual taxes, Banking Cash Transaction Tax (likely to be introduced), Agriculture Subsidies and service tax & Excise Duty.