Thomson Reuters Global Tax Market Development Lead, Vinay Sethi evaluates the Union Budget 2016-17 presented by the Finance Minister Arun Jaitley. He says the budget is in the right direction however it lacked major changes
Vanita Peter D’Souza | The Dollar Business
Though the Union Budget lacked any major changes, Finance Minister Arun Jaitley managed to provide some relief to small taxpayers, push growth, mobilise resources and bring some certainty and rationalisation into the tax regime, said Thompson Reuters.
Assesses have welcomed tax rebate for small tax players under section 87A and 80GG while turnover limit under Presumptive taxation scheme under section 44AD of the Income Tax Act has been increased to Rs.2 crore. This can be availed by professionals with gross receipts up to Rs.50 lakh with profit deemed to be 50% of their gross receipts.
In case of corporate taxes, the rate is lowered for the next financial year for companies with a turnover not exceeding Rs.5 crore to 29% plus surcharge and cess. Vinay Sethi, Market Development Lead, Global Tax, Thomson Reuters says, “Even though this move is set in the right direction however, it does not fulfil expectations to gradually reduce the corporate tax rate to 25% for all companies.”
The Modi-led government will now enforce the provision for requirement of country by country reporting for companies with consolidated revenue of more than Euro 750 million in line with the BEPS initiative of OECD. “The provisions of determining residency of foreign company on the basis of Place of Effective Management (POEM) is proposed to be deferred by one year and so has been the commitment to implement General Anti Avoidance Rules (GAAR),” Vinay expressed to The Dollar Business.
The Finance Bill also proposed changes in the customs and excise duty to add further impetus to the government dream project ‘Make in India’ which would reduce costs and improve competitiveness of local industry in sectors like IT hardware, capital goods, defence production, textiles, mineral fuels & mineral oils, chemicals & petrochemicals, paper, paperboard & newsprint, maintenance repair and overhauling of aircrafts and ship repair. “This is a positive enforcement to the significant Make in India initiative.” Vinay added.
Vinay Sethi , Global Tax Market Development Lead, Thompson Reuters
March 02, 2016 | 01:50pm IST