Budget Reactions – Vikas Vasal, KPMG
Vikas Vasal, Executive Director, KPMG, shares his post Union Budget 2011 reactions with CXOtoday.com
This year, the Government had its own compulsions under which it had to present its budget wherein on one hand, the challenge was not to increase taxes and at the same time reduce fiscal deficit, control inflation and meet the increased demand of subsidies on food, fertilizers and petrol.
Therefore, as expected, this year’s budget is more of a balancing act especially on the revenue front wherein the net impact of direct and indirect taxes is more or less revenue neutral.
From individual’s tax perspective, a minor relief of Rs.20,000 has been granted by increasing the basic exemption limit of Rs.1.8 lacs. A welcome change is in respect of meeting the long pending demand of reducing the age for senior citizens from 65 years to 60 years.
Extension of deduction in respect of investment in infrastructure bonds was much desired, keeping in view the huge deficit which the nation faces to meet the infrastructure investments.
The budget has also proposed simplifications in compliances especially for lower tax payers.
From corporate tax perspective, some relief has been granted by reducing the surcharge to 5%, while the MAT rate has been increased to 18.5% and its scope. Broadly, the budget proposals are in line with the DTC to achieve the corporate tax rate of 30% and widen the overall tax net.
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