Market veteran Vijay Kedia believes the tax relief measures announced in the Budget 2025-26 will add Rs 1 lakh crore of liquidity in the system. However, this may not bring any major shift or move in the market. The benchmark equity index BSE Sensex traded almost flat at 77,493 around 2.40 pm on Friday.
“Budget was better than expected. The exemption of income tax will add Rs 1 lakh crore in the system. This may boost some consumption which is positive for the economy. However, the announcement may not bring any major move or shift in the markets,” Kedia said, adding that he sees some more consolidation going ahead.
The 30-share index has cracked more than 8% since September 2024. In an interaction with BTTV, he added that some of the shares are hovering at a reasonable valuation after the recent correction.
Finance Minister Nirmala Sitharaman revised the slabs under the new tax regime, bringing significant savings for taxpayers. The revised structure offers no tax on income up to Rs 12 lakh.
Under the new tax slabs, income up to Rs 4 lakh is tax-free. The tax rate is 5% for income between Rs 4 lakh and Rs 8 lakh, 10% for Rs 8 lakh to Rs 12 lakh, and 15% for Rs 12 lakh to Rs 16 lakh. For income between Rs 16 lakh and Rs 20 lakh, the tax rate is 20%, while it rises to 25% for Rs 20 lakh to Rs 24 lakh. Any income above Rs 24 lakh is taxed at 30%
As per the revised rate, a person earning between Rs 24 lakh and Rs 50 lakh can save up to Rs 1.10 lakh, while those with an income of Rs 16 lakh can save Rs 50,000. For an income of Rs 20 lakh, the savings amount to Rs 90,000. Over the past decade, the total number of taxpayers has surged by 2.3 times to reach 8.62 crore in Assessment Year 2024 (AY24).
Kedia is known for picking quality stocks on Dalal Street. As of December 2024, he held over 1% stake in companies such as Global Vectra, Tejas Networks, Atul Auto, Mahindra Resorts, Om Infra and Affordable Robotic Automation, among others.