Union Budget 2021 Expectations for Health: "In Budget 2021, tt is important to provide incentives and tax deductions to those who are investing their money in invention or conducting research towards a cure of Covid-19 and also to combat any other unforeseen circumstances due to such pandemic (such as a shortfall in basic drugs)," ASSOCHAM said in its proposals to FM Nirmala Sitharaman.
Demand generation can be supported by giving more money in the hands of the lower bracket taxpayers and thus some changes in tax slabs are expected
Union Budget 2021-22 Expectations for Health: The year 2020 will always be remembered for the onslaught of Coronavirus and the detrimental effects of the highly contagious disease. While we are yet to recover fully from the Covid pandemic, the Narendra Modi government is all set to present Budget 2021 in February. Experts are expecting a big push for the healthcare sector in the upcoming Union Budget from the Central government. Industry body ASSOCHAM has proposed that in Budget 2021, Finance Minister Nirmala Sitharaman must focus on providing incentives to tackle any other “unforeseen circumstances” due to the Covid pandemic apart from a big push for the overall healthcare sector.
“In Budget 2021, tt is important to provide incentives and tax deductions to those who are investing their money in invention or conducting research towards a cure of Covid-19 and also to combat any other unforeseen circumstances due to such pandemic (such as a shortfall in basic drugs),” ASSOCHAM said in its proposals to FM Nirmala Sitharaman.
“We are expecting a big push from the Finance Minister Nirmala Sitharaman for the entire healthcare sector in the 2021-22 Budget. In our comprehensive pre-Budget memorandum, we have submitted how expenditure on development and the related aspects of vaccine manufacture, distribution, and the entire medical chain should be liberally given tax incentives,” ASSOCHAM Secretary General Deepak Sood said.
In its Budget 2021 memorandum to the Finance Ministry, ASSOCHAM stated that for the purpose of section 35 of the Income Tax Act, “scientific research” should include any research related to Covid-19. “To encourage the taxpayers to develop a cure/vaccine against Covid-19 and to cater to the requirement for other basic drugs/any other generic medicines, a special deduction of 200 per cent of the amount expended for research including developing antidotes, any medications/drugs and vaccinations should be introduced,” ASSOCHAM’s Budget 2021 Memorandum said.
In its proposals for Budget 2021, ASSOCHAM said a 200 per cent deduction be also provided to the donors (including non-residents) contributing to any Indian institutions undertaking the vaccination activities. Besides, similar deductions be allowed for the expenditure (including capital expenditure not being expenditure in the nature of cost of any land or building) by companies for undertaking such activities.
Ahead of Budget 2021, ASSOCHAM stated that allowance of the one-time benefit of deduction be provided to the companies opting for the lower tax rate under section 115BAA of the Act, at least for a minimum period of two financial years, the presentation stated. It has said presently Section 35 provides for 100 per cent deduction of expenditure incurred on scientific research.