Prologue: As part of our series focusing on the Union Budget 2019, we’ll be highlighting the opinions of industry experts and see what they think and expect from this year’s Budget. In this article, Nupur Sharma, an expert on corporate tax talks about her Union Budget 2019 expectations. Read on!
In my opinion, there would be changes in the infrastructure and automobile sector. As for infrastructure, I am expecting the government to bring about more profit-linked incentives and more employment generation with the increased influx into this sector. The government should be looking forward to introduce additional investments and depreciation allowances.
I think the government will not be focusing much on the manufacturing and services sectors, as they have made it clear even in recent times that they want to focus on infrastructure development. With infrastructure being the second-highest employment generating industry after agriculture, the government should try and develop infrastructure opportunities through Budget 2019, especially in the organised segment. I do not foresee any significant changes in other industries and also, keeping ‘Make in India’ in mind, infrastructure will be given priority.
With regards to FDI, I expect added incentives and benefits being given to firms wanting to invest in India to further strengthen the ‘Make in India’ campaign, like ease on allowances. Section 80-IAC, which talks about tax incentives for start-ups, has requirement of the turnover not exceeding INR 25 crore up to seven previous years, commencing from the date of incorporation. I expect that turnover to increase from INR 25 crore to INR 100 crore to increase the number of start-ups that can avail the tax incentives.
Although I am not expecting many changes with regards to direct tax, the governmental should certainly increase their tax exemption limit to INR 5 lakh because recently, they had provided a rebate of INR 12,500 for the limit of INR 5 lakh. The existing provisions would not be helpful to the bigger segment of the taxpayer because the moment your salary exceeds INR 5 lakh, you belong to the tax bracket of the rest 5% which is unfair to the taxpayers earning above INR 5 lakh but belonging to the lower half of the spectrum.
The government should come up with INR 5 lakh as the threshold for income. Apart from that, age-old allowances and exemptions such as children and hostel allowances should be revised with increased benefits as a response to increased inflation.
Also, the current deduction limit of INR 1,50,000 under Section 80C does not serve the purpose with the cost of living rising constantly every year. We have reached a time when the burden of taxes on the individual taxpayer should be reduced, so that he can focus on his all-round development. Considering that, there should definitely be an increase in the current deduction limit.