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Budget 2016 expectations: With FM Arun Jaitley set to present the Union Budget on February 29, 2016, it is important to note what employees want from the government. There are typically four sets of parameters that come up as core expectations in any Union Budget – at the most basic level is the ability of the budget to drive enhanced economic activity which creates jobs and provides more opportunities for employees. But beyond this there are three other significant aspects that the white collar workforce would look forward to – a rationalized tax structure, keeping a check on core consumer price inflation and creating distinct incentives to drive entrepreneurship. (AP)
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Economic activity has a direct correlation to job opportunities and pay levels in India today. Given the limited pool of employable talent in the country today, any significant improvement in economic or business activity results in increasing pay levels as the talent demand – supply curves come in to play. Clearly if employees in India are to expect significant pay increases going forward, there has to be a very distinct improvement in business activity. (AP)
From a tax perspective the Budget needs to clarify its stance on taxation of the National Pension Scheme – it has almost been a non starter on account of the lack of clarity on the tax treatment at withdrawal. The current taxation structure also needs to account for actual cost and inflation rates when adjusting exemption limits on different allowances or on tax benefits under Section 80C etc. (AP) -
This is also a year where organizations may take pay increase decisions on the basis of lower inflation rates that currently exist. Any volatility in consumer price inflation would significantly impact cost of living and earnings for employees and therefore the budget would need to ensure that increased economic activity does not necessarily come at the cost of inflation. (AP)
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Finally, Indians and particularly the younger generation are increasingly excited with entrepreneurial opportunities. The Budget should focus on providing tax incentives for entrepreneurs particularly when they receive funding as well as on ESOP’s and other vehicles that are used as compensation tools in such organizations. (By Anandorup Ghose, Partner – Talent & Rewards, Aon Hewitt Consulting) (Image: AP)
Govt extended ITR AY 2025-26 deadline, but only 4.56 crore returns filed so far
