Budget at a glance: What stock market investors need to know

CAPITAL GAINS
AIFs Get Clarity on Tax
The government has clarified that profits earned by ‘Category 1 and ‘Category 2’ alternative investment funds (AIFs) from sale of securities will be treated as capital gains and not business income which is higher. So investors in AIFs will pay capital gains tax and not 30% income tax.

MF DIVIDEND

TDS Limit Doubled
Threshold limit of tax deducted at source (TDS) on dividend income from MFs has been doubled to ₹10,000. Now, there will be zero TDS on dividend income of up to ₹10,000.

UNLISTED STOCKS
Tax on FPIs’ Long-term Gains
Foreign portfolio investors will have to pay long-term capital gains tax of 12.5% on the income they make from the sale of unlisted securities, aligning it to listed stocks. This was 10% for unlisted stocks till now.

P-NOTE GIFT
Boost for Funds in IFSC GIFT City
There will be no tax on P-notes (or ODI ) issued by funds in IFSC GIFT City. PN investors of FPIs in Singapore pay no tax.