Budget 2022-23 to be tabled today: Here's what to expect
Union Finance Minister Nirmala Sitharaman will present her fourth Union Budget 2022-23 today. All eyes would be on how the government balances out populist measures while walking the tightrope of fiscal consolidation. While Indian corporates are expecting some key announcements which will enable them to reset their growth agenda, individual taxpayers are expecting some more disposable income in their hands to invest and consume more.
Setting up a separate ministry and creating special scheme on digital literacy for the elderly are among the recommendations made by some NGOs for the upcoming budget. The government told an all-party meeting Monday that it does not intend to bring any legislative business in Rajya Sabha during the first part of the Budget Session which is till February 11, sources said. The meeting was convened by Rajya Sabha chairman M Venkaiah Naidu through virtual mode to discuss the agenda for the Budget Session that started on Monday.
As India works towards a USD 5 trillion economy by 2025, and with just 2 days to go for 2022-23 Budget, here are the top five market expectations on direct and indirect taxes.
1. 80C deduction available up to Rs 1.5 lakh a year be revised upwards significantly;2. To make the optional concessionary tax regime, which came into effect from April 2021, more acceptable, raise the threshold Rs 15 lakh income for laying peak 30% tax rate;
1. Rationalisation of Customs duty structure for EV and ancillary components, renewable energy generation devices and related components is likely.
2. Sector-specific concessions for semi-conductor manufacturers with focus on exports is expected.
3. Budget allocations for the expansion of the PLI scheme for sectors such as leather and laminates; additional incentive schemes will also lure companies into setting up additional manufacturing in sectors that were not the focus in previous budgets and help reverse the impact of the pandemic.
4. The government is already reviewing 400 customs duty exemptions (as announced in the previous budget). The final list is expected to be proposed as part of the 2022 budget and industry is awaiting it so that there is no adverse impact on trade as a result of this exercise.
5. Extension of customs duty exemption on goods imported for testing, and setting up of a customs dispute resolution forum, ease compliances under customs, and integration of the current ICEGATE, DGFT and SEZ online portal into a common digital platform.
Nangia Andersen India Chairman Rakesh Nangia said notably, the top end of businesses, as well as the upper-middle class, is doing sufficiently well, despite the indelible impact left by the covid crisis. "India is witnessing real consumption problem as the less affluent segments have still not come out of their distressed situations.
The budget's key focus must be to enable the ecosystem around job, income, and demand creation. There is also a need to address various challenges including the most important consideration viz. data protection faced by relatively newer sectors like telemedicine, tele lawyering and ed-tech," Nangia said.
Deloitte India Partner Gokul Chaudhri said the budget is expected to provide relief to lower and middle-income earners with disposable income impacted due to inflation. Also, India has agreed to do away with equalisation levy (EL) and follow the multilateral solution in the form of Pillar 1 and 2 agreed between 137 member countries working at the OECD Inclusive Framework.
"It is expected that the budget will introduce a necessary legislative framework to facilitate implementation of these and also lay down a road map for stakeholder consultation," Chaudhri added.
AMRG & Associates Senior Partner Rajat Mohan said while the middle class expects higher disposal income to counter intensifying inflation, large corporates anticipate stability in tax structure, MSME desires availability of extra liquidity to fund business growth, and foreign investors expect a conducive business environment for long-term strategic investments from Budget 2022-23.
Nangia Andersen LLP Partner-Indirect Tax Samir Kapadia said if the Government earnestly wants to promote India as a manufacturing hub and pursue the policy of Atma Nirbhar Bharat, then the Government needs to take some pragmatic measures.
"These measures, among other things may require, rationalizing the rate of primary inputs /intermediaries one hand; and on the other hand, increase the rate of finished products to provide a tariff protection to promote domestic manufacturing in India," Kapadia added.
Dhruva Advisors LLP Partner Sandeep Bhalla said the Media and Entertainment sector requires mammoth investments in digitisation, technology set up and distribution network.
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