Budget 2025: Finance Minister Nirmala Sitharaman introduced the financial year on Saturday, February 1, whose main focus is on 4C – Capex, Consumption, Fiscal Consolidation and Employment Creation. Major steps have been taken to give relief to the middle class by changing the tax slab to give relief to the middle class, which is expected to speed up consumption. Personal tax cuts will bring more money in the pockets of common people, which can increase both investment and expenses. Experts believe that these budgets of the budget can see a sharp increase in SIP inflow. Let us know that in December 2024, SIP Inflow crossed the figure of Rs 26,000 crore for the first time.
SIP flow can increase by cutting personal income tax
Deepak Ramraju, Senior Fund Manager, Shri Ram AMC, says that the Union Budget for FY 2025-26 has given more emphasis on consumption-based economic development as per the expectations of the equity market. Cuts in personal income tax can increase the discretionary spending, which is likely to increase the performance of auto, consumer durables, retail, travel and tourism and selected FMCG companies than wide markets.
In addition, tax exemption can lead to high savings, which can increase SIP flow and provide more support to the market. Sectors associated with the capital market such as AMC and brokerage houses can expect more retail participation. The budget has no negative impact on capital gains, which can maintain a positive trend in the market for a moderate period.
Financial burden will be reduced on middle class
Shripal Shah, MD and CEO of Kotak Securities, says that a major relief has been offered in Personal Income Tax, which will make the tax of individuals with income up to Rs 12 lakh. The move is expected to reduce the financial burden on the middle class, reduce the impact of rising prices, and to promote higher consumer expressing as well as investment. In addition, many reforms in TDS and TCS system have received good response.
Record breaking investment in SIP, Inflow crosses 26,000 crores in December
The trend of investment through a systematic investment plan (SIP) in mutual funds is increasing rapidly. In December 2024, SIP Inflow crossed Rs 26,000 crore for the first time, where investors invested a total of Rs 26,459.5 crore. The figure was Rs 25,320 crore in November 2024. This is an indication that investors are giving priority to regular and systematic investment.
Why is investment growing rapidly in SIP?
AK Nigam, director of BPN Fincap, said that these days the craze of investment in SIP is increasing rapidly and there are many reasons for this. First, awareness about investment in people has increased. Second, the market strength and stability have strengthened the trust of investors. Third, technical features have made investment much easier than ever. Fourth, there is also an option to take tax benefits (in ELSS) through SIP. In addition, the new generation of youth is more aware and active about investment, which is becoming the main reason for accelerating the SIP.