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Nation Other News 02 Feb 2020 By Invitation: NDA&r ...

By Invitation: NDA’s please-all budget has some hits, some misses

DECCAN CHRONICLE. | SHALINI PILLAY
Published Feb 2, 2020, 2:31 am IST
Updated Feb 2, 2020, 2:32 am IST
Start-ups are scaling up and contributing massively to employment generation and growth of the economy.
Finance Minister Nirmala Sitharaman (ANI photo)
 Finance Minister Nirmala Sitharaman (ANI photo)

Union Budget 2020 is the first budget of the NDA-2.  It strives to bring Ease of living to every Indian citizen by weaving it around prominent themes of Aspiratio-nal India, Economic development and Caring Soci-ety with good governance and financial security acting as key enablers. The proposals have remained true to the focus laid by the government on ‘spur-ring the growth impulses in the economy’ and focus on new economy, large disinvestment target, infrastructure push, investments in renewable energy and providing support to MSMEs.

Recognising that digital revolution has catapulted India to massive heights in the global arena, the Budget seeks to further enhance digital penetration through announcement of various schemes and initiatives.

 

Adhering to the much sought-after request of the middle class, the Budget introduces a new alternate personal income tax regime wherein income will be progressively taxed at lower rates at six different slabs, subject to foregoing of certain deductions/ exemptions.

On second glance, it appears that the new tax regime could ignore incentivising of savings, and in a country like India, where there is no robust social security framework, one wonders whether this change will spur consumption.

For the corporates, the budget has conferred multi-fold benefits in the form of removal of DDT, base expansion by increasing the turnover threshold for tax holiday benefits for start-ups, faceless appeals, faceless penalty, deferral of taxation due to significant economic presence, dispute settlement scheme etc. The FM has done away with the DDT liability of companies on dividend and proposes to shift the tax burden on the dividend recipient. This will result in India attracting more foreign investments by offering a low tax regime.

Start-ups are scaling up and contributing massively to employment generation and growth of the economy.

In the wake of start-ups increasingly ope-rating in the food space, “Kisan Rail” and refrigerated coaches in express and freight trains will encourage further investments in the start-ups.

Further, in order to keep to its commitment to uphold transparency and ease of business, Budget 2020 proposes to introduce faceless appeals thereby eliminating human interface. While the details are yet to be come, it appears to be beneficial to both the government and assessee.

From an indirect tax perspective, changes in customs duty is primarily driven by ‘inward looking’ policy to protect domestic industry along with rationalisation of custom duty rates.

On GST, simplified returns and separate penal provision for issue of fake invoice to curb fraudulent transactions is a welcome step.

However, Budget 2020 has remained silent on some of the aspects like laying out a roadmap for implementation of the DTC, taxation of high net worth individuals and capital gains. It side-steps controversial yet critical inve-stment enablers for infrastructure.

All in all, as one size does not fit all, this Budget has sought to address many of the concerns of the industry but has mis-sed out to touch upon some important issues as well.

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