Homefinance News

    Budget 2022: Experts list out direct, indirect tax expectations

    finance | IST

    Budget 2022: Experts list out direct, indirect tax expectations

    Mini

    As part of CNBC-TV18's special segment ‘Budget Countdown’, we try to guage what changes in the direct tax and indirect tax regime is likely to be made by FM Nirmala Sitharaman tomorrow. To dig deeper, CNBC-TV18 spoke to MS Mani, Partner- GST, Deloitte India, and Amit Singhania, Partner, Shardul Amarchand Mangaldas and Co, about tomorrow’s Budget expectations from a tax perspective.

    With expectations from the Union Budget skyrocketing, as part of CNBC-TV18's special segment ‘Budget Countdown’, we try to guage what changes in the direct tax and indirect tax regime is likely to be made and presented by Finance Minister Nirmala Sitharaman tomorrow.
    To dig deeper, CNBC-TV18 spoke to MS Mani, Partner- GST, Deloitte India, and Amit Singhania, Partner, Shardul Amarchand Mangaldas and Co, about tomorrow’s Budget expectations from a tax perspective.
    Firstly, Mani highlighted that the Budget only provides directional clarity on the GST (goods and services tax) regime. However, fuel inclusion under GST is something that one can watch out for in the Budget.
    He said, "One thing that we have to bear in mind is while the Budget does not have much to do with GST, except provide directional clarity, the future reform in GST is something which we should be waiting and watching very carefully."
    "As all of us are aware, there has been a lot of discussion in terms of inclusion of petroleum products in GST, also having electricity duty subsumed as part of GST. Now, what is the government's thinking on this - that is something which we should watch out for tomorrow," he added.
    On the Customs Act, Mani explained that there’s been a lot of updates over the last 2 years. He believes some more relaxation on import duty rates for inputs will go a long way in boosting domestic manufacturing.
    "On customs duties specifically, we have had a lot of action over the last two years in respect of two themes, one is the Aatmanirbhar Bharat as the overarching scheme, the other is in respect of the PLI (profit-linked incentive) schemes for various sectors, and some of it is underway even now," he said.
    He explained, "Now, the key over here is if we have to become self-sufficient, within a finite timeline of let us say, a year, two years or three years on many of these products, we will need to bring in imports of components and inputs at very reasonable rates of import duty."
    "So while there has been a decline in the import duty rates over a period of time, what could really give a big big boost to domestic manufacturing is if we see selective reduction of import duty on certain inputs and certain components, where the idea is to manufacture in India and export out of India," Mani added.
    Meanwhile, Singhania highlighted the changes in the Income Tax Act that could benefit the salaried class. He mentioned that since costs have gone up for the salaried class due to the work from home culture amid the pandemic, raising the 80C deduction limit to Rs 3 lakh will give some respite to salaried individuals. Additionally, increasing the standard deduction by Rs 50,000 will benefit immensely.
    "The 80C deduction is capped at Rs 1.5 lakhs rupees per annum per individual. 80C deduction requires upward revision because this particular deduction has not been revised for last many years. In the past we have seen that the moment you increase the 80C deduction, the investment into the savings schemes also gets increased," he explained.
    "Another point to note is that 80C deduction is already overcrowded. So, this requires considerable revision probably from Rs 1.5 lakh to 3 lakh at least, so that the salaried class can have some breathing space in terms of their tax planning," he added.
    Singhania further mentioned, "It is not a very big deduction because the increase in standard deduction from Rs 50,000 to Rs 1 lakh is not a very significant amount of sum. Considering the work for the home scenario, inflation, the salaried class is already incurring some expenses while working from home so at least some kind of a marginal relief can be given to them because their cost of operating from home, cost of electricity, cost of internet expenses, something can be borne from this Rs 50,000 to 1 lakh amount."
    Watch the video for the full interview
    Catch all our Budget updates live here
    Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
    next story

      Most Read

      Market Movers

      View All
      CompanyPriceChng%Chng