Budget to nudge I-T regime closer to DTC
While personal income tax rates have already been aligned with the slabs and rates proposed in DTC, corporate tax rates continue to be slightly higher than the DTC rates including cess and surcharge. Since the average effective tax rate on corporates is below 25% (despite a 4 percentage-point increase since 2006-07 due to the phasing out of exemptions), it is unlikely that the extant rates would be disturbed.
KR Sekar, partner, Deloitte, said: “We expect stability and certainty in the tax regime, measures to revive the economy and steps towards a more effective dispute resolution that unlocks the amounts involved.”
The phasing out of profit-linked incentives and replacing them with investment-linked ones had started some years ago, with more substantive moves being in the last couple of years. Yet, as far as the alignment of the existing tax provisions with the DTC is concerned, there is scope for more action in this year’s budget. Some of the concepts outlined in DTC including the
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