The Union Budget 2019-20 is due to be announced by the Minister of Finance Nirmala Sitharaman on 5 July 2019 and taxpayers and companies have been anxiously waiting for the Budget announcement hoping for major reforms in the tax front.
The Small and Medium-sized Enterprises (SMEs) is one such sector who have their hopes pinned high ahead of the Budget. The SMEs not only contribute to the growth of the Indian economy but also boost the nation’s trade and employment sector.
The SMEs speculate the re-elected Modi government to address issues such as tax regime, labour laws and the cost of compliance in the upcoming Budget. At present, SMEs are required to adhere to the same labour laws such as ESI scheme and EPFO, and compliance laws as large enterprises in most of the cases.
Also Read: Highlights of Economic Survey 2018-19
As per the Employees’ State Insurance (ESI) Scheme, any organization employing more than 10 people is required to register with the Employee Provident Fund Organisation (EPFO). However, the registration with EPFOs ensures the social security of the employees. Hence, it is highly unlikely that the government would make amends in the labour law.
SMEs are also expecting the Budget to announce amendments on the tax regime. This would allow smaller and medium-sized companies to increase their operations at a better rate.
Earlier in 2016, the corporate tax for establishments and companies having a turning up to Rs.50 crore was reduced to 25%. The following year, companies and firms having a turnover of less than Rs.250 crore were also given the same corporate tax benefit.
Taxpayers across the nation have been expecting the first full-time woman Finance Minister Nirmala Sitharaman’s maiden budget to announce major tax benefits which will give them a sigh of relief on the tax front.
Abbreviation is the name of the game – SIP, NPS, ELSS, KTM, and OMR.
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