While tracking the Union Budget 2020, it has been clear that the Finance Minister aims to boost the MSMEs and NBFCs in India. For the MSMEs, we welcome the move to subordinate debt for entrepreneurs of MSMEs and treat it as quasi-equity. On the government’s directive, if the RBI extends the window of debt structuring by one year to March 2021 will also bring a further breather for India’s small-scale enterprises.
The government has further addressed the liquidity crunch faced by the NBFCs and HFCs and it is a welcomed move to raise the FPI limit in corporate bonds to 15% from 9%. Reducing the NBFC eligibility for SARFAESI Act to Rs 100 crore from Rs 500 crore AUM is another positive move and will help boost the lending potential in the country.
Other moves, especially the ones boosting indigenous manufacturing of electric equipment, mobile phones, and semiconductors, and the other move to digitalise Indian villages and Gram Panchayats also come bearing good news for the nation. At Aye Finance, we look forward to making the most of these developments and supporting India’s burgeoning MSMEs through easy access to business finance.
Archit Gupta, Founder and CEO, ClearTax
Complex tax regime for taxpayers with the slabs rejig. With the optional new regime, taxpayers will have to evaluate what works better. Those committed to long term saving and investing via 80C may be discouraged and this may likely demotivate taxpayers from tax-saving linked investing.
DDT removal is good as it increases dividend received in the hands of the taxpayer - however, such receipts to now be taxable in their hands. Those above 20% tax slab - will now face more tax on their dividend income.
We welcome deferment of perquisite taxation - now taxation at the time of 'exercise' deferred to 5 years or till they leave the company or till they sell their shares - whichever is earlier. This will be a key plank for hiring quality resources.
Raising turnover threshold for audit for businesses to Rs 5Cr is a welcome relief. Hopefully tax filing for such businesses will also be simplified. However, such businesses will have to be careful with keeping cash transactions under 5% and will need a technology based mechanism to track that.