Budget 2019: 'Extend SEZ exemption from 2020 to 2025'

Mr. Salil Bhandari, Founder and Managing Partner of BGJC & Associates LLP  

Every one is very optimistic about the budget after the impressive win this government has had in the elections.

What the country needs is a robust vision document and its implementable plan. Budget can serve that purpose.

The two top most priorities should be investment in Education and Health. Private sector can not cope with the humongous task of educating India and providing a healthy life. Various social schemes have been announced in the past by each successive government.

What India now needs is a vision of how the country is going to take care of its population. In past decade or so we see that medicine has become a ‘specialist only’ domain. The need is to implement a plan where the General Practitioner is the respectable starting point for the sick. He then takes it to the next level of nursing homes and then where required the sick move to specialist hospitals. The need to reduce costs of health services can not be emphasized more. 

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The next big expectation is with the agriculture sector. We have to make agriculture attractive for anyone and everyone to pursue. The plight of the farmers has not changed since times immemorial. Why are young boys attracted to IT and not agriculture. It’s pure economics. The children of the farmer do not want to be a farmer but are ready to become a construction labor! It means that they are not able to earn even Rs 400-600 per day in farming! Why can not a farmer earn double of that when the final consumer is paying the price of the produce multiple times of what the farmer sells at. This has to be addressed in an emergent basis. The rural youth drain to urban cities will stop. Infact there will be a reverse trend in no time. The goal should be to make agriculture more glamorous then Industry, IT sector and white colored jobs. The starting point is high returns.

Infrastructure: We have been talking of infrastructure development over the past two decades and a lot of money has also been invested. A lot has happened but now is the time to consolidate it. Every ministry should be forming its own vision and plan as to how they will improve the infrastructure in their area. It should be a comprehensive document which becomes a basis for focused development.

  • Road
  • Rail
  • Travel
  • Health
  • Education
  • Urban centers
  • Semi Urban centers
  • Rural
  • Micro Industry
  • Small Industry

Finally, the taxation. Big-ticket fillip is required to be given to manufacturing and trade. This is an emergency as many will fail soon leading to a catastrophy. The impact will be felt on banking, taxation, employment etc. The increased money in hand with the middle class which pays most of the taxes will go in increased buying or savings. To manage inflation, attractive saving schemes and area specific infrastructure investment bonds can be announced e.g Travel infrastructure bonds, rail bonds, road bonds etc.


The specific expectations on Direct taxes - 

1. Initial exemption limit should be increased to Rs.5,00,000 for all assesses. Large number of new assesses will start filing nil returns.

2. Standard Deduction for salaried employees should be increased to Rs.1,00,000. They are the most taxed in terms of percentage of tax to income.

3. There is a SEZ exemption which should be extended till 2025 which presently will terminate in 2020. The past three years have been very difficult and business were not able to get much benefit from it. 

4. Exemption on interest on housing loan should be increased to Rs 3,00,000. This will give boost to the real estate and construction sector.

5. Capital Gain on sale of house property should be reduced to 10 %. This will further boost the real estate sector.

6. Long term gain on equity should be done away with.

7. Dividend tax should be reduced to 10%.

8.Deduction under chapter VI A limit which is presently Rs 1,50,000 should be enhanced to Rs 2,00,000.

9. Income tax return forms need to be simplified. There is no clarity in the forms resulting in proposed addition done for previous AY 2018-19 to the income.

10. Presumptive tax structure should be uniform for all professionals under section 44 ADA and 50% deduction should be allowed for all business.


In case of GST:

1. Limit of services should be increased to Rs.40 lakhs from the present Rs 20 lacs, so the small businesses can survive.

2. Quarterly return filing should be done for businesses exceeding turnover of Rs.5 cores.

3. 28% rate of GST should be abolished.

4. For turnover upto Rs.5 cores quarterly payment of should be allowed.

5. Refund process of GST in case of export should be further simplified.


The author is the Founder and Managing Partner of BGJC & Associates LLP.  

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