My first cut reaction is that this is a good Budget giving focus on 9 Pillars

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My first cut reaction is that this is a good
Budget giving focus on 9 Pillars
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• My first cut reaction is that this is a good
  Budget giving focus on 9 Pillars which include
  focus on Infra, rural areas, relief to small tax
  payers, creating ease of doing business,
  affordable housing and so on and so forth. Fiscal
  deficit has been proposed to keep at 3.5 which
  is a big positive without compromising
  development agenda. On Taxation front, there are
  simplification and rationalisation measures,
  introducing presumptive taxation for small and
  medium tax payers. Keeping in line with objective
  of unearthing black money, the FM has proposed to
  introduce Domestic black mint by laying 30 tax,
  7.5 surcharge and 7.5 penalty thus totalling
  45 to be operational from June 1, 2016 to Sept
  30, 2016 in a manner that tax will be paid within
  2 months of declaration. Numbers of measures have
  been introduced for reducing tax litigation.
• Most recommendations of Tax reforms
  administration report and Easwar Committee have
  been accepted - this is a good simplification and
  rationalisation measures. On capital market
  front, additional tax on dividend has been
  introduced at 10 in addition to DDT if dividend
  income exceeds Rs.10 lacs. Short term capital
  gains tax period for non-listed companies has
  been reduced from 3 years to 2 years - the FM was
  silent on listed companies.

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Corporate tax rate has been reduced from 30 to
29 in restricted cases thus the path to reducing
tax rate and also corresponding incentives will
need to be examined in detail. 3 year tax holiday
has been introduced for startups with keeping
Minimum alternate tax leviable. Introducing 10
tax on patent companies is a big boost for IPR
related companies and it looks like it is in line
with country like UK. On international taxation,
Base Erosion and Profit Shifting measures
including Country by Country regime. Also the
FM made a declaration to resolve retro taxation
by paying tax and no interest and penalty.
Deferring POEM by a year is a good measure. GAAR
will be introduced by 01/04/2017 as proposed last
year. This looks like a big measure to create
certainly, predictability and non-adversarial tax
regime and create ease of doing business in
India. Overall, on tax front there are good
rationalization measures on both direct and
indirect taxation. Also there are good 9 Pillars
of FM'a speech which should take India to an
increased growth story soon.


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