This year the story is different. Modi army is in mood to break all the traditions. There won’t be a separate railway budget. In fact, it will be merged with Jaitley’s budget, ending a 92-year-old practice of a separate budget for the country’s largest transporter. Normally Budgets are announced on last working day of February But, this year You would hear the Budget session for 2017 on 1st of February, 2017. The very purpose of making the blue out of the Box is to allow people and professionals enough time to observe with the changes and to plan for coming year well in advance.
Another good initiative bring with this Budget is that All the important documents will be submitted through Union Budget Information System (UBIS).
Since, the year-end brings lot of twists and turns with Demonetization which forced the entire country to stand in line for their money before the ATMs and Bank Branches, common man is Hoping for big Reliefs and relaxations. People have not forgotten the Pain and if Mr. Jaitley failed to show his Kaabiliat it could be the major turndown for Modi Government.
We will try to understand Tax planning arena under following categories as key stakeholders
> The Public
> National Growth
> Investment growth Avenues
- Salaried Employees who faced the major crunch of heat in demonetization would expect Increase in slab rate from current Rs. 2, 50,000 TO at least Increase to the level of Rs. 3, 00,000/- Apart from the slab increase other area would be to Increase overall tax deduction to Rs. 3,00,000/-
- In the mid 2016 Indian Government shows its disinterest in giving relief to long term capital gain tax benefits for investments in India Routing through Mauritius and made suitable amendments in Bi-Lateral treaty between India and Mauritius. We expect Ministry to bring conformity and more clarity on Investment routing through other routes.
- Talking of Emerging trend in startups like E-commerce which is already in consideration and enjoying Certain Tax Benefits would need for more pressing reforms and support in terms of valuation and Relaxations in FDI to overcome cash crunches. This area require support in Innovation and technology through relaxing
- As country is heading towards cash less economy, there is an urgent need to encourage IT sector to undertake such change and to be able to deal with huge Network crunches. Since, IT Network is the major concern we would expect for major announcements in terms of Technology orientation and easy in supply of technology.
- last year we saw tremendous increase in M&A Activities. We can call it Brand Modi impact who visited countries to promote Indian economy in favor of Investors. Further, in the list of easy in doing Business India still lack of reforms support. this Budget we could expect certain tax relaxation in such transactions and more clarity on strategic movements.
- When will GST Roll OUT? This is the question even Mr. Jaitley is struggling to find the answer. In a recent GST Committee meeting it is discussed that the GST Rollout seems unlikely by 1stApril, 2017. GST Finally will be finally a reality on 1st July, 2017. Matters which are proven to be hurdle for GST shall be finalize on priority and provides clarity on the sharing of revenue between center and states.
- REITs/InvITs are brought into the category of Hybrid Instruments with features more like equity securities. With this modification Govt is expected to attract more retail Investors to invest. It can only be done by providing proper tax structure and Higher allocation towards housing for all scheme to make it viable for small players.
- Finance Minister in the last session proposes to reduce the corporate tax burden slowly and significantly to 25%. It’s time for the Ministry to initiate the corporate tax reduction process to attract more foreign companies to do business and focus on more reforms within.
- Finance Minister has to address with concerns on higher Recapitalization of PSU Banks and NPA (Non-Performing Assets) Issue.
- We expect tax exemptions for renewable energy sectors which are facing higher cash crunch with No Investment magnetic force measures.
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