India Budget 2021: Why the country is in dire need of tax reforms
Dhirendra Tripathi/Delhi Filed on January 31, 2021
Tax compliance in India has always been abysmal. However, the Modi administration is trying to make the framework simpler and people-friendly, amid the challenges of Covid-19.
Amongst the biggest challenges any Indian finance minister faces is how to mop up more revenue to fund the government expenditure on defence, social welfare, and health. It’s a country where interpretation of tax can be arbitrary and revenue leakages are high. For the current incumbent, Nirmala Sitharaman, the task will be even more onerous when she gets up to present the budget for the next financial year, which begins on April 1 and ends on March 31, amid the raging coronavirus outbreak that has singed growth and drastically whittled down revenue.
Budget 2021: Debt-laden telecom sector expects tax reliefs, lower licence fee
ccording to EY, the industry expects Budget to offer price support in the form of Goods and Service Tax (GST) exemption from regulatory payments such as license fee and spectrum usage charges (SUC)
BusinessToday.In | February 1, 2021 | Updated 05:51 IST
Telecom companies owe Rs 1.47 lakh crore in additional statutory dues to the government
The cash-strapped telecom industry, which is battling with competitive pricing and Adjusted Gross Revenue (AGR) dues, has been pinning its hopes on the Union Budget 2021 to offer some breather. According to EY, the industry expects Budget to offer price support in the form of Goods and Service Tax (GST) exemption from regulatory payments such as license fee and spectrum usage charges (SUC).
While the government is likely to incentivise each sector, as the global epicentre for information technology, performance of the Indian IT industry is likely to be crucial
Budget 2021: Accord infrastructure status to real estate sector
The government can consider extending the harbor limit to 20 per cent for next three to four years.
Real estate sector is an important pillar for the economic growth and stability of the country. It is the second largest employment provider and also supports various sub-sectors, such as steel, cement, infrastructure. Consequently, the government has undoubtedly taken measures to incentivise the sector. However, owing to the ever-changing landscape, the sector faces many challenges, such as lack of liquidity, delay in projects, unstable demand among others.
To add to the issues, COVID-19 related lockdown led to an unprecedented era for real estate sector. Apart from the policy initiatives, the industry expects that the upcoming Union Budget 2021 will address direct tax challenges to alleviate the stress surrounding the sector.
WHAT IS CORPORATE TAX AND CORPORATE TAX RATE? Corporate Tax Corporation Tax or Corporate Tax is a direct tax levied on the net income or profit of a corporate entity from their business, foreign or domestic. The rate at which the tax is imposed as per the provisions of the Income Tax Act, 1961 is known as the Corporate Tax Rate. The Corporate Tax rate is based on a slab rate system depending on the type of corporate entity and the different revenues earned by each of corporate entities.
For existing companies Under the new tax slab announced by the Finance Ministry, corporations with annual turnover up to Rs 400 crore and not seeking any incentives or exemptions need to pay 22 per cent tax along with applicable cess and surcharge. This takes the effective corporate tax rate to 25.17%. However, with the introduction of the new guidelines, companies don t have to pay any minimum alternate tax or MAT.