'Corporate sector may rejoice over lower corporate tax'

By Archit Gupta

Taxpayers were expecting more from this budget, given the boost in tax revenues as mentioned in the speech. In line with Niti Aayog's proposals, there is annual tax benefit on interest cost of upto 1.5L for taxpayers for purchase of Electric Vehicles. However, rest of the eco-system for EVs will need to be put in place first, or this remains only symbolic. The higher tax benefits for home loans, are definitely a push for housing sector and may encourage more investment.
The corporate sector has much to rejoice with lower tax rates for corporates with turnover upto Rs 400cr, this is a big boost.
Besides disinvestment proposals, there wasn't much in the speech on how the government will increase tax collections. The increase only comes by raising taxes for high income earners (2cr to 5cr, and more than 5cr) by increasing surcharge. A lot more could be done and hopefully it will find place in DTC.
It remains to be seen how TDS on cash withdrawals in excess of Rs 1crore will be implemented in practice, thankfully a majority of the population will not be impacted.

From a Start Up Perspective :
The Budget looks promising for startups and our rating is good. The following promises must be put into practice soon and aggressive scrutiny of startups receiving funding must be put to an end.
A capital gains tax exemption is allowed under section 54GB of the Act to an investor who sells a residential house or plot and invests the net consideration in equity shares of a start-up company, which company in turn has to use the amount to purchase a new asset. This exemption is available for investments made until 31 March 2019. This is now extended to 31 March 2021.
Pending assessment of startups - no inquiry/verification to be carried out by AO without obtaining approvals of supervisory officer
Relaxed norms for set off and carry forward of losses for #startups have been proposed.
No scrutiny to check the valuation for ‘Angel Tax’ if start-ups and investors file declaration - via e-verification.

The author is Founder & CEO at ClearTax.

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