India Inc wants the upcoming budget to include lower corporate tax, concessions in personal income tax, removal of LTCG on equities, and continuity of fiscal recovery.
The industry associations batted for the focus on the simplicity of working together in large business producing areas, including the travel industry and textiles.
“We need lower taxes and exemptions removed. The rate we have talked about is 18-20%. We have to work together with the government to simplify tax codes to make it easy for people to pay and calculate tax,” said Vikram Kirloskar, Confederation of Indian Industry (CII) President, after a meeting with revenue secretary, Ajay Bhushan Pandey.
The CII asked for a decrease in distribution tax rate from 15% to 10% and exclusion of capital gains tax on equities and alternative minimum tax. It also sought an extension of investment allowance to all sectors.
In a pre-budget memorandum, the Federation of Indian Chambers of Commerce and Industry (FICCI), called for a reduction of the corporate tax rate to 25% to allow the Indian companies to remain competitive globally. The standard tax rate for organisations with a gross turnover exceeding Rs 250 crore is 30%.
Kirloskar said, “The key sectors to be propelled for more job generation include the tourism ecosystem, the textiles-to-garments value chain and farm-to-fork supply in the agriculture and food processing sector.”
He added that the decrease in the income tax and an increase in investment allowance to companies would “fire the four engines of consumption, investment, government spending and exports.”
FICCI also demanded special tax reductions for exporters and chosen export manufacturing zones to lure more significant investments to export-related manufacturing.
The CII suggested that the government provide sufficient resources to recapitalise banks. This will improve their ability to lend and meet credit demand. It recommended a reduction of government stake in public sector banks to 51% and consolidation of these banks.
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