FM must take front seat to drive auto sector’s growth agenda
On the direct taxes front, measures such as higher tax depreciation rates for this capital-intensive sector, clarification on availability of weighted deduction on construction of test tracks, reduction of MAT rate would bring cheer to the auto segment. Higher depreciation rates would support the domestic capital goods industry as well. The introduction of domestic transfer-pricing provisions has taken forward India’s image as one of the toughest transfer pricing regimes. While the introduction of advance-pricing agreements was one of the key positives last year, long-awaited safe harbour rules may be introduced this year. Advance ruling facilities should be extended to resident taxpayers to bring desired certainty.
Though little, but the recent rate cut by the RBI has sent some positive vibes in market. A deduction under income tax for interest on vehicle loans would not only spur sales but would also increase the government’s revenue by way of taxes due to increased sales. The basic tax exemption limit may be aligned to Rs 3 lakh for individuals to enhance disposable income in lower- and middle-income brackets, which could stimulate demand in the sector.
With India’s global image already
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