+91 96066 18000

+91 80 41281 383 • Srinivasam, No. 20, 9th Cross, 6th Main, Malleshwaram, Bengaluru

Home  / Sinhasi Insights

Vol. 7, February 2022

07 February, 2022

← Previous  |  Next →
Vol. 7, February 2022

This year we have great expectations from the market.
Where will it reach, what impact will it have on our portfolio, which sectors will go up, how should our allocation change.

In line with the immortal Charles Dickens words, 'I have been bent and broken – but – I hope into a better shape'we take a look at what the year 2022 will hopefully hold for us.

And the first formative steps of the year have come from the Hon'ble FM's 2022 Budget Speech, pertinent points of which, we have presented for our investors below.

 

PERSONAL INCOME TAX
Digital Assets

  1. Income arising from transfer of virtual digital assets will be taxed at 30%.
  2. Loss from any other capital or digital assets cannot be set off against gains from digital assets. Cannot carry forward losses to future FYs.
  3. 1% TDS on transfer of a digital asset to a resident Indian.

KEY QUESTION >
Transfer of digital assets are peer to peer.
HOW WILL THE GOVERNMENT TRACK THESE?
Information is still awaited.

Bonus Stripping & Dividend Stripping for REIT & InviT
The practice of buying stocks/MF units prior to the record date of bonus/dividend issue and selling at ex-bonus/ex-dividend price to set-off against other gains is now eliminated.

Surcharge on Capital Gains
Surcharge on capital gains is all capped at 15% including unlisted shares. Helpful for venture capitalist, employees of private entities / start-ups who hold ESOPs.

Other notable actions pertaining to Income Tax

  1. Sum from employer for 'treatment of Covid-19 related health issues to an employee or his/her family members' shall not be treated as a perquisite.
  2. Funds received from employer to family member of an employee due to employee death (capped at ₹ 10 lakh) will not be considered as income, if paid within 12 months from death.
  3. Annuity/lump-sum from Insurance policy paid to guardian/parent of a disabled person is exempt from taxation.
  4. Post Office network to be brought under core-banking system to ease investing in Post Office savings scheme.
  5. A 'CBDC - Central Bank Digital Currency' based on Block Chain Technology is proposed and digital rupee is expected to arrive in FY2022-23.
    More info awaited...

Fixed Income Markets

  • Expectation of 'tax relief for FIIs to invest more in Indian G-Sec' hoping to attract minimum $15 billion foreign money into Indian bond markets NOT ANNOUNCED. G-Sec yields go up.
  • Govt’s market borrowing is higher at ₹11.2 trillion causing the 10 year G-Sec yields to move beyond 6.80%.
  • 'Sovereign Green Bond' to fund green energy related CapEx plans will be one more debt instrument henceforth.
LOOKING AHEAD

Prior to Budget 2022, consumption was seen as a main driver of growth while now the narrative has been changed to 'CapEx led growth' to encourage corporates to set up new manufacturing plants.

For a fully detailed Budget analysis on these points and more, please look out for our website blog update early next week. Stay tuned.


Further below, you will find links to many other expectations that the market holds for various entities who analysed current and possible future trends that will shape the market.

What we expect from
the Year 2022?

Our own take on what the year will hold for us basis foreseen events that will impact the market.

 

 

The World Economy
BY COUNTRY

While many people feel that the Indian markets are overheating and heading towards a higher than 10% correction, they also expect the Chinese markets to rise faster than the Indian Sensex. While it may inherently be true we feel the Risks with Chinese Equity far outweigh the expected gains.

 

 

PMC Bank Resolution Scheme
APPROVED BY THE GOVT. OF INDIA WITH STAGGERED DEPOSIT PAYOUT

Investor expectations from debt investments needs to sober down. Click to Read Now

  • The objective of investing in FD & maintaining funds in a savings account is for mainly capital protection, not capital appreciation.
  • If a secondary objective is to get a few additional basis points return, the primary objective of 'capital protection' gets compromised.
  • Priorities have to be set - If the intention is to get additional return, consider increasing the allocation to equity. Additional risk in debt (FD & SB a/c) to get a few basis points additional returns is not worth it.

"Bulls make money,
Bears make money,
but Pigs get slaughtered."
OLD WALL STREET SAYING

Finshots has given us an interesting view on will the “bubble” finally pop in 2022?

READ THE ARTICLE

That’s it from the Sinhasi Desk for the weekend.


Let's hope for many more happy returns of the … err… in your investments.

Thank you.

TEAM SINHASI

This year we have great expectations from the market.
Where will it reach, what impact will it have on our portfolio, which sectors will go up, how should our allocation change.

In line with the immortal Charles Dickens words, 'I have been bent and broken – but – I hope into a better shape'we take a look at what the year 2022 will hopefully hold for us.

And the first formative steps of the year have come from the Hon'ble FM's 2022 Budget Speech, pertinent points of which, we have presented for our investors below.

 

PERSONAL INCOME TAX
Digital Assets

  1. Income arising from transfer of virtual digital assets will be taxed at 30%.
  2. Loss from any other capital or digital assets cannot be set off against gains from digital assets. Cannot carry forward losses to future FYs.
  3. 1% TDS on transfer of a digital asset to a resident Indian.

KEY QUESTION >
Transfer of digital assets are peer to peer.
HOW WILL THE GOVERNMENT TRACK THESE?
Information is still awaited.

Bonus Stripping & Dividend Stripping for REIT & InviT
The practice of buying stocks/MF units prior to the record date of bonus/dividend issue and selling at ex-bonus/ex-dividend price to set-off against other gains is now eliminated.

Surcharge on Capital Gains
Surcharge on capital gains is all capped at 15% including unlisted shares. Helpful for venture capitalist, employees of private entities / start-ups who hold ESOPs.

Other notable actions pertaining to Income Tax

  1. Sum from employer for 'treatment of Covid-19 related health issues to an employee or his/her family members' shall not be treated as a perquisite.
  2. Funds received from employer to family member of an employee due to employee death (capped at ₹ 10 lakh) will not be considered as income, if paid within 12 months from death.
  3. Annuity/lump-sum from Insurance policy paid to guardian/parent of a disabled person is exempt from taxation.
  4. Post Office network to be brought under core-banking system to ease investing in Post Office savings scheme.
  5. A 'CBDC - Central Bank Digital Currency' based on Block Chain Technology is proposed and digital rupee is expected to arrive in FY2022-23.
    More info awaited...

Fixed Income Markets

  • Expectation of 'tax relief for FIIs to invest more in Indian G-Sec' hoping to attract minimum $15 billion foreign money into Indian bond markets NOT ANNOUNCED. G-Sec yields go up.
  • Govt’s market borrowing is higher at ₹11.2 trillion causing the 10 year G-Sec yields to move beyond 6.80%.
  • 'Sovereign Green Bond' to fund green energy related CapEx plans will be one more debt instrument henceforth.
LOOKING AHEAD

Prior to Budget 2022, consumption was seen as a main driver of growth while now the narrative has been changed to 'CapEx led growth' to encourage corporates to set up new manufacturing plants.

For a fully detailed Budget analysis on these points and more, please look out for our website blog update early next week. Stay tuned.


Further below, you will find links to many other expectations that the market holds for various entities who analysed current and possible future trends that will shape the market.

What we expect from
the Year 2022?

Our own take on what the year will hold for us basis foreseen events that will impact the market.

 

 

The World Economy
BY COUNTRY

While many people feel that the Indian markets are overheating and heading towards a higher than 10% correction, they also expect the Chinese markets to rise faster than the Indian Sensex. While it may inherently be true we feel the Risks with Chinese Equity far outweigh the expected gains.

 

 

PMC Bank Resolution Scheme
APPROVED BY THE GOVT. OF INDIA WITH STAGGERED DEPOSIT PAYOUT

Investor expectations from debt investments needs to sober down. Click to Read Now

  • The objective of investing in FD & maintaining funds in a savings account is for mainly capital protection, not capital appreciation.
  • If a secondary objective is to get a few additional basis points return, the primary objective of 'capital protection' gets compromised.
  • Priorities have to be set - If the intention is to get additional return, consider increasing the allocation to equity. Additional risk in debt (FD & SB a/c) to get a few basis points additional returns is not worth it.

"Bulls make money,
Bears make money,
but Pigs get slaughtered."
OLD WALL STREET SAYING

Finshots has given us an interesting view on will the “bubble” finally pop in 2022?

READ THE ARTICLE

That’s it from the Sinhasi Desk for the weekend.


Let's hope for many more happy returns of the … err… in your investments.

Thank you.

TEAM SINHASI

Related Blog Posts

Feb'24 Edition

Feb'24 Edition

06 March, 2024 |

Jan '24 Edition

Jan '24 Edition

17 January, 2024 |