Hail-a-tax to catch a ride: Budget focuses on MSP assurance, tax adjustments & sectoral reforms despite implementation challenges
budget's rubric comprised four stakeholders: the poor, women, youth, and farmers. What drew immediate attention was reiteration of the interim budget's announcement of MSP for farmers of a 50% margin over the cost of production. This was assured by the previous FM, but didn't see the light of day. The renewed assurance will be watched closely. Women, youth and the poor have been assured many benefits, for which disbursements will be the real test.
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Beginning with direct tax rates, short-term and long-term capital gains tax rates will be reduced to 20% and 12.5%, respectively, and exemption limit on some financial assets will be raised to ₹1.25 lakh annually. Corporate tax rate on foreign companies will be reduced from 40% to 35%, though securities transactions tax (STT) on futures will increase to 0.02%, and on options to 0.1%.
Safe harbour rates will be provided for foreign mining companies in diamonds. TDS on ecommerce operators will be reduced to 0.1%, while the ambit of TCS will be widened on high-value notified goods, floating-rate savings bonds and payments to partners by companies. For simplification, charities will be taxed under a single regime.
On administration, taxpayer services will be further digitised. More officers will be deployed for tax disputes, where India is more burdened than most countries. What is unclear is how the sum total
