So again telling you that you want to borrow and invest and trade, I’m not interested in you being in the capital market. Third, your options STT has also gone up.
SHARAN HEGDE: Okay.
FEROZE AZEEZ: Right. Buyback taxation. My promoter is at a disadvantage, investors at an advantage. So when everything which has been done, I’m giving you a few examples which are top of mind which indicate that India is going to be an investor’s market as against a trader’s market. It’ll definitely spook the trader fraternity. And the trader is who reacts on a Sunday, investors not even opening his terminal because of the budget. That’s why you see volumes are very low today. Volumes are not high because it’s a Sunday with a trading market. That’s one reason.
So long term I’m positive economy, it was great. But traders will definitely be one set of people who move out and that will create some buying opportunity for the guys whom they need to hand it over to the share to the investor.
Impact on Retail Traders
SHARAN HEGDE: So I wanted to ask, he mentioned that the STT has gone up. Exactly. Can you give an example or a case study of how much additional tax a trader is going to pay now? Because the market is reacting so badly to that. Like is that really a big impact today?
NITESH BUDDHADEV: True. I completely agree with Feroze. Because if I am an institutional trader, that’s going to be a huge additional cost. When I say 0.02% to 0.05% on sell of futures, as an individual, if I’m doing one lakh rupees of trading that was till now 200 rupees has gone up to 500. So not much of change to me though it’s more than 150% change if I say from 0.02 to 0.05.
SHARAN HEGDE: But the starting number itself was so small.
NITESH BUDDHADEV: Because it’s 200 to 500. But if you see at the institutional level that’s a huge cost. So one aspect when you meet institutional level.
SHARAN HEGDE: You mean like at a level of what kind of a company?
NITESH BUDDHADEV: I’ll just give an example. So let’s say we are a big proponent of investing into arbitrage fund. But now arbitrage fund will get impacted. The return in arbitrage fund might get impacted. Why? Because they buy in let’s say future and have a position in the cash market. So they try to take the benefit of the opportunity of that arbitrage. But the cost has increased now. So the return henceforth you will see get impacted in the arbitrage fund.
SHARAN HEGDE: Interesting.
NITESH BUDDHADEV: So but as a layman, if somebody is doing at the retail level also future and option, not too much impact. Because as I told you per one lakh, 200 to 500. If I go a bit ahead and if I tell you about the options also, it rose from 0.1% to 0.125% which is per one lakh, 100 to 150 on option selling. If I’m exercising the option it was per 10 lakh rupees 1,250. That has been 1,500. So honestly as a retail trader also you are not impacted. But of course 91% of the people don’t make money on future and options. That’s one of the reason you should not be investing or trading into future and option. But yeah, at institutional level this will impact a lot in terms of cost.
Impact on Mutual Funds
SHARAN HEGDE: So Feroze, he mentioned an interesting point about arbitrage funds. And you’re in the wealth management space as well. Any other changes that you feel like? Any mutual funds? Because there are thousands of options. Any mutual funds that is going to benefit from this current budget because of the specific measures taken by the government. Can you share some light on that? Any specific categories of mutual fund that’s going to do well versus doing bad?
FEROZE AZEEZ: Yes, I think equity category which was grappling with the FII exit. What was I looking for in the budget? Can it destroy the cult of Indian equity investing in mutual fund?
SHARAN HEGDE: Yeah.
NITESH BUDDHADEV: At all.
FEROZE AZEEZ: Because you’re getting 31,000 crores of SIP. See last year 1 lakh 66,000 crores of FII selling happened.
SHARAN HEGDE: Okay.
FEROZE AZEEZ: DII bought 7 lakh 60,000 crores. In spite of doing so much sale, FII was just 20% of DII purchase. If DII purchase stops then all hell will break loose. So what I was looking for is does it spook the Indian retail investing individual. That has not happened thanks to the lot. 5, 6 lakh crores or how could that have happened? What could have happened if there was a tax change again because 12 and a half was not a great round number. And Sanjay, who’s now the RBI governor, I think I had heard him say that we will make it to 50. That was a fear. Of course.
SHARAN HEGDE: Was that a real fear according to you this budget?
FEROZE AZEEZ: Because last time there was some inconsistency when they made it 10 to 12 and a half. There was one person from the ministry who said that this is the end, this is the stop, last station. One guy said this is not the last station. I’ll bring it around. That could have been one of the challenges. And the second thing which makes me feel that mutual fund categories like arbitrage is definitely going to be a detriment. But arbitrage is going to be something which will anyways not create too much wealth for me. Wealth is 15% compounding probability. So that I am reasonably confident that equities, especially small caps. Now if you ask me.
Small Caps and Buyback Taxation
SHARAN HEGDE: Yeah. Because that has been a point of discussion that small caps have not been performing well. What’s going to happen to it now after Budget 2026?
FEROZE AZEEZ: One thing which happens beautifully, which is the nuance. It’s not visible to naked eye. And your viewer might just miss the benefit of a buyback taxation. Buyback taxation is not something which is a great tax benefit but it is a trigger for a behavioral change in the boards of companies. Okay, what do I mean by that?
SHARAN HEGDE: But first can you explain what is this buyback taxation? Because the common man doesn’t know what this is.
FEROZE AZEEZ: Okay, now I have to first explain what is buyback. See when there is a company which is a listed company like our listed company.
SHARAN HEGDE: Okay.
FEROZE AZEEZ: We are like the NSE small cap 250. We are the 27th weight out of the 250. So we are reasonably large in the small cap category with 25,000 crore market cap which is Anand Rathi, which is Anand Rathi Wealth Limited which is whom I represent as a joint CEO. Now what happens is let’s assume my profits which I’ve been projecting for this year is 375 crores after tax. I finished my last reserve, came to 280, 290. With God’s grace, if I do 375 crores of profit now I have a choice. Should I distribute this to my shareholder?
SHARAN HEGDE: Yeah.
FEROZE AZEEZ: Or should I retain it? Generally people will distribute some portion, retain some portion. Now if I want to distribute 200 crores of this I can give a dividend.
SHARAN HEGDE: This is called dividend.
FEROZE AZEEZ: You just pay. You don’t have to do anything. The shareholder who has one share will get—
SHARAN HEGDE: Let’s say I own one share in your company.
SHARAN HEGDE: How much will I get?
FEROZE AZEEZ: Let’s assume I give seven rupees dividend. In the past, you would get seven rupees. Sharan will not even have to act. He will automatically get seven rupees in his bank account. Yeah, correct. Now, in that, Sharan will have to pay added to his income and pay the tax.
SHARAN HEGDE: Which could be anywhere between 30 to 40% in my case.
FEROZE AZEEZ: With your amazing income, 60% bracket for you. God’s grace. Okay, coming back. So dividend. The other is a buyback. Let’s assume Sharan has two shares. If I offer a buyback of 100 crores, Sharan will have an opportunity to surrender one of his shares to me. And the company will use the company profits or reserves to buy out Sharan’s one out of the two shares.
So what happens? Sharan does not have to sell his share in the market. Can sell his share to the company. So what happened? Sharan’s supply didn’t go to the market. But Sharan’s supply came to the company. And company’s profits were used to give you a liquidity. That implies that the number of people going and selling in the market will reduce. And in turn the share price becomes more stable.
SHARAN HEGDE: How does it become more stable? The share price.
FEROZE AZEEZ: Okay. Now if I didn’t give Sharan an opportunity to surrender his share to me as a company, what will he do?
SHARAN HEGDE: If Sharan needs money, I’ll sell it in the open market. And in the open market, anything can happen.
FEROZE AZEEZ: He has to find a new buyer. Now 100 crores. If somebody is doing a buyback, then everybody surrendering 100 crore worth share to the company rather than selling this hundred crores to the market.
SHARAN HEGDE: So you can define that price.
FEROZE AZEEZ: You can do that. There are two ways to do buyback. A company can do a buyback and then do open market buyback. Then it will tell Sharan to sell in the market and buy it in the market.
SHARAN HEGDE: So what is the advantage for me as Sharan?
FEROZE AZEEZ: The other share which he owns will have a better price. Okay. This is a little more nuanced thing.
SHARAN HEGDE: What about the taxation? For me earlier it was 30%.
FEROZE AZEEZ: It was 30%. Now it is 12.5% because Sharan is not the promoter of this company. If you are Mr. Anand Rathi, the tax would have been 30%. If you were a promoter company, it would be 22%. But neither are you a promoter, nor are you a company who is promoting this company. Your tax will be 12.5% if held for greater than one year, which is a great thing. They’ve graded types of investors.
So every investor should be happy, retail investor, that now my buybacks frequency will increase, my taxation will reduce if frequency increases. And if I don’t even participate in that buyback, that means that company is buying out its shares which is a very good positive sign.
Strategic Opportunities in Buyback Announcements
So now how does one trader derive a strategy out of what I just said so that it does not remain academic? You can look at all the NSE small cap 250 companies which have fallen the most. Look at their balance sheet. Who has got maximum cash? Those are the guys with the higher probability to announce a buyback because they want their share to go up or they want to distribute it.
And now they found a very efficient method to distribute this money cost effectively to a common shareholder. If my love for my common shareholder is high and if I have hundreds of crores staying in my balance sheet and the government says no tax, I’ll be very happy for my shareholder who supported me to bring me to this market. So that could be a high probability event. So you can use analytics to find out which of the 250 companies is yours.
SHARAN HEGDE: One of those companies I can’t say, right?
FEROZE AZEEZ: There’ll be another tax on me then to be flouting the rule of governance.
Understanding Buyback Taxation for Retail Investors
SHARAN HEGDE: So Nitesh, now I would like to hear from you.
NITESH BUDDHADEV: I’ll contribute on the same side that if I am that retail person and I am doing the buyback, how it would be taxed. So I’ll give you an example. Let’s say currently if I offer any share for the buyback, let’s say I bought it for 2 lakh and now the value is 3 lakh rupees. And I’m giving it a buyback on 3 lakh rupees.
Sharan, as of now I have to pay as per my tax bracket 30%. I have to pay 90,000 tax. On whole buyback amount I’m getting, there would be some element which is my cost. But on the whole buyback amount of 3 lakh rupees I have to pay 30% tax. So it was that bad. Or if I get a dividend, on the whole dividend amount I have to pay 30% tax. There is no change on the dividend.
But like Feroze mentioned, why the more and more company will now go for the buyback? Because it’s win-win for both promoter and as investors, as a shareholder. Right. So what will happen now in the same case? Let’s say I’m giving a buyback of 3 lakh rupees. This is applicable from the 1st of April 2026.
So from 1st April 2026, if I go for a buyback and let’s say the buyback price I’m getting is 3 lakh rupees and the cost of my that particular shares are 2 lakh rupees. So I have to pay capital gain only on 1 lakh. And not only that, that’s consider that as a long term, I’m holding for more than 12.5 months or 12 months. And then I’m offering this for a buyback. So I will pay 12.5% tax. Not only that, you know that in my long term capital gain I don’t have to pay tax up to 1.25 lakh per person per PAN.
SHARAN HEGDE: This exemption.
NITESH BUDDHADEV: Exemption, right. So if I give you in this example, 3 lakh rupees is a buyback value. 2 lakh is my cost. So 1 lakh is my gain on this buyback. On that I will pay 12.5%. But if the total gain during the year is less than 1.25 lakh rupees, that is not taxed. So again this is a win-win and it’s a great change. I would say though people are not anticipating how big it is. You will see next financial year.
SHARAN HEGDE: One doubt I have. Earlier company was giving dividends, meaning I was still holding the shares and I’m getting dividends. But now when buyback is happening, I have to sell the shares because the company is buying it from me. So what if I don’t want to sell the shares? Like I just want the dividend, then how do I do it? I have to give up the shares. What if I’m further expecting more capital gains on the shares?
NITESH BUDDHADEV: So whenever you typically see the buyback, that always comes at a better price than the market price. So I can even do the buyback and after a few months again I can acquire the share if I want. So that’s the good thing you can do about managing this buyback.
And like Feroze mentioned that example he gave, when there is a less shareholder, my per share income will go up. So that’s also anyway beneficial. Even if you are not acquiring new share, the existing shares which are holding, because you are not going to give all the shares in the buyback, you are giving few of the shares in the buyback. So the remaining shares market price can also increase. So it’s a very good situation in case of buyback.
Changes to Sovereign Gold Bonds
SHARAN HEGDE: Interesting. Very, very innovative way of sort of protecting both investors as well as the promoters. So gold and silver has corrected by almost 10 to 20% in like a single day. So is there anything that the budget has now announced which will allow me to sort of optimize my reinvestment strategy into gold and silver? Anything that you can shed some light on?
NITESH BUDDHADEV: Sure. Sharan, in all the budget when you see the fine print there is always some googly. Why I’m mentioning that, when I was reading few of the fine print I came to know about the Sovereign Gold Bond, SGB. And we have promoted quite a lot. When I say promoted, we always encourage people to get into the SGB.
SHARAN HEGDE: For the last three, four years we’ve been saying this.
NITESH BUDDHADEV: The reason Sharan, it has changed drastically and that’s bad for investor is that, you know that, let me give an example so that would be more clear to all the listeners. Let’s say you have got into SGB from the government when they announced, the RBI announced and you got some SGB. And now you are going to any online platform, Zerodha or Groww or something. You are going and you are selling it.
Now when I buy it, you have to pay capital gain tax. No change in that. But now if I buy and I give it on redemption to the RBI, for me also tax is exempt. I repeat, when I buy in the market from a demat account SGB and when I sell it or redemption with the government, I also don’t need to pay any tax even though I just stayed invested for two, three years.
SHARAN HEGDE: So just to summarize, SGBs usually say that you have to hold it for eight years to be tax exempt, right. Now if I have to sell it before eight years, that’s where I go into the secondary market. I’m not selling it to RBI, I’m selling it to you because you’re waiting to buy, right? So if I sell it to you, if I hold it for five years, for me also it’s tax exempt?
NITESH BUDDHADEV: You have to give it to government only, then only it’s tax exempt.
SHARAN HEGDE: But what about that five year thing?
NITESH BUDDHADEV: No, you get a long term capital gain, you have to pay tax on that.
SHARAN HEGDE: Okay.
NITESH BUDDHADEV: You pay 12.5% tax because you hold for more than…
SHARAN HEGDE: There was a five year cut threshold.
NITESH BUDDHADEV: That’s five year cut threshold if government is asking you to surrender it before eight years. After the five years there are few tranches where they can ask for the early redemption.
SHARAN HEGDE: But if I do it in the secondary market then I have to pay tax.
NITESH BUDDHADEV: Yeah, you have to pay. So nothing has changed for you. But now why will there be buyers when you want to sell? Because as a buyer if I go and buy it from you or from any other in the market, for me also if I stay invested till the remaining period which could be 2, 3, 2 to 3 years, anything, for me it’s also exempt, right? That has changed in this budget. So from 1st April 2026, I go and surrender at the redemption to government and I have bought it.
SHARAN HEGDE: When you mean government, RBI?
NITESH BUDDHADEV: RBI, because…
Sovereign Gold Bonds: A Major Tax Change
NITESH BUDDHADEV: They will ask for the maturity when there is a due after the eight years. Let’s say you have invested for five years, okay? And remaining three years is with me, okay. So for me is also till now tax exempt, but from 1st April 26th it’s changing. So I have to pay tax on that because I’m a secondary holder and not the primary holder. So that’s a big change. So from tomorrow onwards I think SGB will have less traction. That’s a big thing. Why? Because nobody wants to buy SGB now. Because there is no benefit in the buying in a secondary market from the—
SHARAN HEGDE: Dmat. So even if I buy it now before the new rules kick in, right? But if I sell it after, still I will not get—
NITESH BUDDHADEV: Why? Because that law is getting implemented from first April 26th. So if I’m already holding in the secondary market which I bought, let’s say a year back from this or Dmat, okay. And now before 31st March 26th there is redemption opportunity with the government, then—
SHARAN HEGDE: Only after that role, right?
NITESH BUDDHADEV: So now I am expecting from Monday, which is tomorrow onwards, which is from the next day from the budget, the liquidity in the SGB, once people come to know, should dry up.
Sector Allocation and Investment Strategy
SHARAN HEGDE: Feroze, I wanted to ask you this because you are somebody who is also responsible for understanding which sectors to invest in next. So based on what the government has said now about the current CapEx, where is the market going to move the most in terms of sector level allocation? For you, how would you look at it?
FEROZE AZEEZ: I’d say if you look at, I’ve been saying ABC, which is auto, banking and consumption. Of course the infrastructure spending has gone above about 8, 10%. Do I see a material change in infrastructure stocks? The answer is no. Infrastructure as a sector is not done too well.
SHARAN HEGDE: Okay. Auto has done really well in the last few years. So will that continue to happen?
FEROZE AZEEZ: To my mind, yes. Okay. Now coming to which are the sectors of the future. How does he identify whether the sector is good and not chase your own tail? Generally heart says buy something which is doing well. Like people are screaming buying silver, gold, right, without realizing that it is in the hands of an option trader sitting in Chicago Mercantile Exchange.
SHARAN HEGDE: Yeah.
FEROZE AZEEZ: So we always have this tendency of arranging performance in the descending order, which is the highest performance. Let’s go by that. But ideally you have to put it in the ascending model. The smallest performance first. Then you will see the worst performing three sectors in the last six months. Worst performing, very difficult to buy any of that. It’s not. It’s easier said than done. But at least in an Excel sheet you’ve not put in money. At least arrange them in the ascending order rather than the descending order. Then look at the top four, five sectors which have done worse. Then you start waiting for their turnaround.
How do you check whether any of these fives have started doing a turnaround? This is my method, my company’s method. Right or wrong.
SHARAN HEGDE: Okay.
FEROZE AZEEZ: Most often than not 90% you go right. You look at that subsector across two quarters and see. Let’s assume the quarter three results are coming. Like you said it.
SHARAN HEGDE: Yeah.
FEROZE AZEEZ: What I’ll do is I’ll list down the Nifty. It has 10 companies. Only has 10 companies. I’ll list down these 10 companies, look at if there are any bad results, making sure still the stock is going up. That’s a good turnaround story of a sector. Why does it happen? Common sensing. If a bad result is still not pushing the share down, it implies anybody who was owning the share for the short term has already quit the share. Only long term guys remain.
Now when you know that all the short term guys, these active FIIs, very, very short term, they buy and sell like minutes. If those guys are not there in the share is when a bad result will give you a share price, but upwards. If out of these Nifty IT 10 companies, 4, 5 companies showed this attribute, then I know this. It’s at the cusp of a turnaround. Will the turnaround happen in a quarter or a year? You don’t know. Like auto, I have been saying for the last 5, 4, first 3, 4 anchors taunted me so much. You’re saying auto, auto, auto. It took nine months for that call to play out. Then auto was one of the best sectors for the full calendar year.
SHARAN HEGDE: Now if you see that descending order, it’ll—
FEROZE AZEEZ: It’ll come right up or somewhere close to it.
SHARAN HEGDE: Yeah.
FEROZE AZEEZ: So that’s how we spot a reversal trend in a sector.
SHARAN HEGDE: And just one last thing. Based on what the government has said now in Budget 2026, is there any change in the way you’re looking at the different sectors? Because I think defense budget has increased, for example, right. So any of those sort of indicators that you’re going to look at now which has probably changed the way you look at the sectors?
FEROZE AZEEZ: Yes, I think defense has. Defense, unfortunately as a sector is so diverse in terms of you. You think that some of the stocks are so frothy. Some of the stocks have reached their coffee level, not the froth level. So defense has to be bottom up, not top down. Even after today, rail and railways associated stocks are not so frothy. Okay, I don’t want to mention stocks because I’m not qualified to. That’s one space where it’s good to fish there. That’s a pond you would like to fish in.
Then you look at sectors like cyclical sectors, especially with representation in Nifty. Okay. Cement stocks. Some cement stocks will do phenomenally well in my belief, especially if they are in Nifty. Okay. What is happening to Nifty stocks is today NPS also has a 14 lakh crore AUM. EPFO has so much AUM. When equity allocations of these two indirect entities of you and me is going into equity market, it is going into 90% into Nifty.
So if I like a sector and if I like a stock between two stocks, if it is in Nifty and not in Nifty, I will not look at management. I will look at who is going to get the tailwind of liquidity as against the headwind of FII outflow. Okay. A little more profound for it to be comprehended in a shorter span of time. But that’s what.
Compliance Changes and Government Crackdown
SHARAN HEGDE: So what else is there Nitesh? What is going to affect the common man?
NITESH BUDDHADEV: There’s another big change which people are not noticing because this is on the compliance side.
SHARAN HEGDE: Okay.
NITESH BUDDHADEV: Now in the economic survey released two days before the budget, government has quoted few numbers. Okay. In last whole year, income tax are giving nudges to income taxpayer that if you have not disclosed your foreign asset, disclose. If you have done fake political donation, disclose. If you are claiming fake HRA, disclose. And it’s not just a random nudges.
SHARAN HEGDE: So basically if I have a house in Dubai, or if I have donated to BJP, or if I have a—
NITESH BUDDHADEV: What are the last thing? Wrong claiming or excess claiming of your. Make some—
SHARAN HEGDE: Fake receipts for my rent from some shop. Then what happens?
NITESH BUDDHADEV: Now I have the concrete number, how much tax already collected by this nudges. Because when nudges came to the respective assessee, people started going and submitting the real data. So the foreign asset campaign prompted nearly 20, 25,000 taxpayers came forward and shown 29,000 crore of foreign assets that they were not disclosed earlier. That they have disclosed.
SHARAN HEGDE: Wait, wait, wait. Repeat that number again.
NITESH BUDDHADEV: Right. 29,000 crore of foreign asset disclosed after the nudges by government by 25,000 people. By 25,000 people. Not only then, more than 1,000 crore of income people disclose because of this nudges. Foreign income. Okay, so you have some dividend income, some income from capital gain, selling Nvidia and all that thing. Now people are disclosing because people are. Because government income tax is sending this nudges.
SHARAN HEGDE: And these are people living in India, right? Having all of this income in other parts of the world.
NITESH BUDDHADEV: Perfect. Second point, rich people are there. Second point, fake political party donation.
SHARAN HEGDE: Okay.
NITESH BUDDHADEV: 91,000 taxpayers. This is government data by the way, Sharan. Okay.
SHARAN HEGDE: What is this? Fake political donation.
NITESH BUDDHADEV: So people get exemption of 100% if you donate to some political party. Okay. That you can claim 100% exemption. So you are donating 5 lakh to any political party, registered political party, whole 5 lakhs you can claim exempt. But this is a whole black money is rotating in the system. How? This is not a kind of a legal transaction. You donate. Somebody donates 5 lakh rupees to a political party after deducting some percentage.
SHARAN HEGDE: Let’s say I have a party called Hegde Party and you donate 5 lakhs to me, right?
NITESH BUDDHADEV: You are a political party, registered political party. If I donate 5 lakh to you and that political party is giving back that cash.
SHARAN HEGDE: Oh, I’m giving you back the cash.
NITESH BUDDHADEV: By deducting certain percentage. Because this political party has so much of cash income they want to turn it to white. So this is whole kind of black money things going in the system.
SHARAN HEGDE: But the party is involved in this also.
NITESH BUDDHADEV: Few government, few political, small political parties, right?
SHARAN HEGDE: Are involved in this.
NITESH BUDDHADEV: Involved in this. So.
SHARAN HEGDE: So this is like the government’s way of sort of claiming those people who are giving these fake donations to these smaller parties, right? And these smaller parties are benefiting from this setup, right? So it’s a way of defeating the competition through legal ways. I like it.
NITESH BUDDHADEV: So approximately 91,000 people came forward and said that, okay, we have shown it fake or by mistake we have shown and all that. So that excessive deduction is worth 2,050 crore. And the tax collected on this is 680 crore till now. And the third but not the last, 119 crore tax collected because people claim fake HRA.
So now what is the change in this? Why we are discussing? Okay, these are the numbers. People should know that income tax is behind you through various sources. They have. You have a choice. They have some six month of period that you can disclose your foreign assets. If you’re not disclosed till now, they announced certain measures that you have to pay 1 lakh rupees of some penalty and disclose up to 5 crore of any kind of assets you have in the foreign.
SHARAN HEGDE: Okay.
NITESH BUDDHADEV: And you have not disclosed till now. Pay 1 lakh penalty and disclose now. This is your last chance.
SHARAN HEGDE: But how will they get to know if I don’t disclose?
NITESH BUDDHADEV: They have various sources. Because now various governments share database.
SHARAN HEGDE: So if I have a house in Dubai, government can tell Indian government that Sharan has a mansion in Dubai. Yes.
NITESH BUDDHADEV: Because they’re done. Yes. This is how the various nations are sharing their database.
SHARAN HEGDE: So I need to tell this to somebody.
FEROZE AZEEZ: Yes.
SHARAN HEGDE: What else?
TCS Changes for Foreign Remittances
NITESH BUDDHADEV: So another few compliance changes. Your TCS as we have discussed has reduced. If you are sending money abroad for your children’s education or you are going. So now that has reduced from 5% to 2%. Either you are spending on the medical needs abroad. If you transfer more than 10 lakh rupees, up till now you pay 5% TCS. Okay, that has reduced to 2%. More than 10. Like if you’re transferring for either a medical reason or education reason. So there was a 5% TCS that has reduced to 2% now.
SHARAN HEGDE: Okay, what about me going? You know I want to invest in Google, Nvidia. And I have an app where I can invest in US stocks. And let’s say I want to invest 1 crore. Earlier I had to pay 20 lakhs extra as TCS. Is that reduced?
NITESH BUDDHADEV: Bad news is that nothing changed in that. If you are investing more than 10 lakh rupees or transferring for all these investments abroad, you have to pay still 20% TCS. There is no change because so no.
SHARAN HEGDE: Benefit for me, no government.
NITESH BUDDHADEV: Either way discouraging that don’t put so much outside. Anyway rupees depreciating.
SHARAN HEGDE: That’s why I’m sending it outside.
NITESH BUDDHADEV: But you cannot do that. But of course if you are paying TCS, that’s not additional tax. You can adjust against your advanced extra. You pay advanced tax a good amount of advanced tax. You can adjust against that but still.
SHARAN HEGDE: Have to wait for three months.
NITESH BUDDHADEV: Yeah, take it.
SHARAN HEGDE: Fine that I understood. What else?
Extended ITR Filing Deadlines
NITESH BUDDHADEV: And last but not the least again because every time you know that when you want to file your return government says sites hangs typically in last five days. So I think there’s some workaround now by government.
If you are filing ITR 1 and 2 your due date going to be the 31st of July. If somebody like you and me filing ITR 3 because we are business and profession that has shifted to 31st of August instead of July, you get one more month from this year onwards when you go and file return for financial year 2025-26 in July 2026.
So for you and me, because we are filing ITR 3 the due date is 31st of August instead of July. But if somebody is only salaried and having capital gain who are filing typically ITR 1 and 2 the due date is 31st July only so bit less load on the government website maybe.
SHARAN HEGDE: Okay, no, but I think chartered accountants have to work for two months now.
NITESH BUDDHADEV: No for that for whole year. Why? Because if you are a partner in firm where there is no audit 31 August if you are with audit it’s 31 October and then there’s a transfer pricing who has this foreign kind of transaction transfer pricing thing the 30th of November. So you have the 31st of July, August, October and November.
No Income Tax Reduction This Year
SHARAN HEGDE: So that’s it. That’s what the budget said this time. So that’s it. Nothing else? No income tax reduction.
NITESH BUDDHADEV: And government has given a lot in last one and a half years, Sharan.
SHARAN HEGDE: But I wanted more. I am tired of paying 42% tax. Nothing for me.
NITESH BUDDHADEV: Then you should plan your taxes.
SHARAN HEGDE: Plan my taxes? Income tax, sir.
NITESH BUDDHADEV: Income tax.
SHARAN HEGDE: What do I do?
NITESH BUDDHADEV: Yes, you can plan your taxes and you can reduce that. Though government has not given a lot. But you can go to a good CA. Go to a good edtech platform and learn about taxes how you can.
SHARAN HEGDE: I’ll just keep my salary zero and I’ll keep the money in the company.
All right guys, thank you so much for watching till the end that is budget 2026. Would love to know any other question that you want us to answer in the comment section below which you felt like we did not answer. And please share your own thoughts about Budget 2026. Anything that you felt like could have been discussed better. Happy to hear your thoughts as well. On that note, guys, I’ll see you in the next one.
Before you go, guys, if this episode gave you even one insight that made you think differently about money, don’t just.
FEROZE AZEEZ: Keep it to yourself.
SHARAN HEGDE: Share it with your friend or family member who could use it too. And if it sparked a new thought or even made you disagree with me, drop a comment below and tell me why. Your critic helps me make these conversations sharper and more useful for you. As long as you have me subscribed, I’ll make sure that you walk away with at least one new thing every Wednesday.
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