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Budget 2019: India Inc pitches for income tax sops

Updated : July 05, 2019 09:48 AM IST

The government will present its Union Budget for fiscal 2019-20 at 11am on Friday and hopes are building that newly appointed Finance Minister Nirmala Sitharaman will announce some income tax sops in her maiden budget today.

Here's what India Inc expects from the finance minister:

1. First and foremost, there are no great expectations because everybody is awaiting the direct tax code (DTC) and that should come through later in July. However, having said, there is hope and expectation that maybe an indicative corporate tax rate cut will come through. The tax rate was reduced to 25 percent -- a company’s turnover of Rs 250 crore in the last budget, hopefully, that gets extended a bit at least today.

2. We also are seeing a lot of the partnership firm talk about how they need parity with companies. So LLPs should be treated on par with companies when it comes to the levy of corporate tax and that’s another expectation.

3. We are not expecting any major changes in MAT or in DDT or in surcharge or cess and that’s because when you have a code coming in later, only then perhaps these should be rationalized.

4. Capital gain tax is still at 10 percent. The industry is hoping that maybe at some point some rationalization maybe for mutual funds that comes through. Right now that rate continues to be at 10 percent.

5. The tax exemptions that companies get on R&D and also the tax exemptions on SEZs will expire in March 2020. So we should get an announcement and an extension on that today.

6. Tax-free infra bonds are something that everyone is talking about because there is a crying need to invest more in infrastructure.

7. The equalization levy or the ‘Google Tax’ might be extended to B2C transactions as well and that is very important. Digital taxation is going to be something that the market watches out for.

8. Last but not least, maybe we hear about some relief for resolution under the IBC. There are certain tax-related issues that still need to be clarified to make the IBC process even more robust and maybe we get to hear that today.

 

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