: Budget may offer tax benefits #finance #StockMarketNEWS #Business ‘Centre’s tax proposals may aim at increasing disposable income’ New Delhi: The government may consider incremental tax benefits

Posted in: #finance #StockMarketNEWS #Business

Budget may offer tax benefits #finance #StockMarketNEWS #Business
‘Centre’s tax proposals may aim at increasing disposable income’

New Delhi: The government may consider incremental tax benefits to increase net disposable income of the citizens in order to boost demand when it tables the Union Budget FY23 in the Parliament on February 1.

Brokerage firm KR Choksey said in a report that the government is expected to further target infrastructure spending to create a multiplier effect and increase job opportunities.

Moreover, it may continue to introduce structural reforms and boost privatisation to attract long-term capital from foreign institutional investors (FIIs). The government may also consider incremental tax benefits to increase net disposable income of the citizens to boost demand. As per the report, the government will put more focus on tax compliance by being more vigilant. Also, there might be some hike in GST rates of some selected products and services by the GST Council to boost GST revenue further.

There might be some changes in InvIT and REIT tax structures with the objective of bringing long-term capital gains treatment at par with other asset classes.

“With robust direct tax collection, we do not envisage any tinkering with the existing income tax slabs, though some incremental tax benefits by the government cannot be ruled out,�? the report said.

“Given the limited headroom for monetary policy action, fiscal measures have become imperative, and we expect the government to address ‘demand’ side factors in the upcoming Budget,�? it added.

This Budget is widely expected to continue with the measures announced in the previous budgets like Aatmanirbhar Bharat, Make in India and PLI schemes etc. One can expect more measures with focus on boosting consumption and helping to revive private sector investments, it said.

The brokerage expects aggressive asset divestures for FY23E with a disinvestment target of Rs 2-2. 1 trillion, public sector reforms in the form of privatisation, recapitalisation and improving corporate governance, reduction in the burden on tax compliance requirements for startups and stress asset funds to address banking sector asset quality aspects.

Among the sector specific expectations, for auto Reduction of GST rate on two-wheelers; re-introduction of the depreciation scheme, financials, setting up of refinance window for NBFCs; focus on digital initiatives.

For pharma Reinstatement of weighted tax deduction at 200% of in-house R&D spending for consumers GST/import duty relief to curb high inflation; implementation of National Retail Policy. For insurance Increase in deduction limit under 80C & 80D; GST rate reduction.