Sops given to start-ups, continuing additional deduction for affordable housing, DDT being abolished and depositor insurance hike to 5 Lakhs, ESOPs not being treated as a perquisite for a 5-year window are some of the praiseworthy measures.
Certainly, there were expectations by way of some strategic announcements particularly towards Direct & Indirect taxes, but it presented a paradox of sorts. In an effort to simplify the tax regime, Direct taxes have actually become complicated as it provides the option to the taxpayer to remain with the old regime or adopt the new regime. Moreover, multiple slabs have been created, which in no way simplifies the tax structure. More thought should have been given on this.
While benefit is given to the people having income up to 15 lakhs whereas higher income bracket people continue to pay surcharge, who are the real wealth creators. They invest huge sums in the development programs of the Government; they were rightfully expecting some relief but they have been left high and dry.
For the first time, the Government has acknowledged the prevalent tax harassment in India, now that administration has been directed to deal with it effectively, shows the Government’s intent to making taxpayers life easier.
Moreover, the budget spelt tax resolution scheme for Direct taxes under which around 4 lakh cases are pending. This would be a great step towards addressing tax harassment as it imposes no interest or penalty here.
Not only this, the Government also addressed the issue of criminal liabilities for civil offences which would be a boon for not only domestic investors but foreign investors in particular. Indeed, a major step towards the ease of doing business. This is an indication that the Government wants to create a clean and conducive atmosphere for the businesses in India.
Like last year, the focus on the rural economy will also lift the auto industry as more income in the rural areas will translate to a spurt in demand for two-wheelers, tractors, cars such as entry-level cars and utility vehicles.
But, yes in spite of all this, markets reacted negatively and became a talking point.
Overall, it can be termed as a populist budget.
Pankaj Singhania, Co-Founder, Lakewater Advisors Pvt Ltd