BackIncrease in income tax exemption limit among top expectations from Budget: KPMG
The survey showed that 64% of the respondents want the government to raise the limit.
PremiumNew Delhi: As the Finance Minister is set to present the Union Budget for FY23 on February 1, an increase in the annual income limit for exemption of personal income tax is among the top expectations from the budget, shows a survey by KPMG.
The survey showed that 64% of the respondents want the government to raise the limit.
"On the individual tax front, most respondents expect an enhancement in the basic income tax exemption limit of ₹2.5 Lakh. Respondents also support an upward revision in the top income slab of INR 10 lakhs and above, and an increase in the existing section 80C deduction limit of ₹1.5 lakh," said the KPMG report.
Further, the report noted that currently Indian branches of foreign companies are subject to corporate tax at 40%. With the government reducing headline corporate tax rate for domestic companies from 30% to 22% starting from financial year 2019-20, the gap between the rates applicable to foreign companies and domestic companies has widened.
A majority of respondents believe there is a need to reduce the rate applicable to Indian branches in line with the 2019 rate cuts, in order for India to remain a globally competitive investment jurisdiction, it said.
With GST revenues on the rise, respondents also felt that the government should not change the current GST tax slabs. The survey also found significant support for the government’s Production Linked Incentive Scheme (PLI) applicable for the telecom, pharmaceuticals, steel, textiles, food processing, white goods, IT hardware and solar sectors.
Most respondents felt that this scheme would help India become a key manufacturing hub, and a whopping 83 per cent of respondents favoured an expansion of this scheme to cover other sectors.
The concessional corporate tax rate of 15 percent for new manufacturing companies comes with a condition that manufacturing is likely to commence before March 31, 2023.
"Given the Covid-19 pandemic and the resultant economic disruptions, a majority of the respondents expect the Government to extend the timeline for commencement of manufacturing /production beyond 31 March 2023," the KPMG report said.
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