CA G Karthikeyan, President, The Start up Academy on Union Budget
The budget a progressive, growth oriented and tax centric exercise. The fact that the budget paid close attention to all vital sectors including agriculture, MSME, Start-ups, the rural economy, infrastructure and green energy indicates enough attention to inclusive growth.
The rationalization of TDS, decriminalization of delays in payment of TDS, adjustment of TCS against TDS payable will substantially benefit the corporate taxpayer. The budget has also provided significant relief in terms of reopening of tax returns by limiting the time and setting a threshold limit to the decision. Any assessment hereinafter can be reopened beyond three years from the end of the assessment year only if the escaped income is Rs 50 lakhs or more, up to a maximum period of five years from the end of the assessment year. This is a welcome move.
Reducing the long-term capital gains tax rate from 20% to 12.5% looks favourable but is offset by the abolition of cost indexation. International safe harbour rules will minimize litigation for the taxpayer and infuse confidence in foreign investors. Abolition of the angel tax will go a long way in removing fear/inhibitions from the start-up ecosystem, Salaried employees in the new regime stand to save Rs.17,500 annually and the increase in standard deduction/family pension will benefit an estimated 4 crore salaried taxpayers and pensioners annually. This will also serve to increase disposable income in the hands of the taxpayers and pave the way for an increase in aggregate demand eventually.
The taxability of share buy back in the hands of the recipient may impact the stock market. Overall this is a good budget which sets the trajectory to realize the dream of “Viksit Bharat”.
What's Your Reaction?
