Pre-budget survey: 78% companies expected to increase income tax exemption limit, 82% said-deduction to increase under 80C
- Finance Minister Nirmala Sitharaman will present the budget on February 1, the focus will be on GDP growth.
- Expectation of personal income tax cuts increased after corporate tax decreased last year.
MUMBAI: The industry hopes that the income tax relief will be announced in the budget. Tax consultancy firm KPMG surveyed 219 companies from 18 sectors. 78% of these companies feel that the income tax exemption limit will be more than the existing 2.5 lakh rupees. 72% expect the lower limit of income to be raised to a maximum of 30% tax. Currently, income above Rs 10 lakh is taxed at 30%. 82% of companies said that deduction would be increased under 80C. 53% is expected to increase standard deduction and 44% to increase tax free allowances like HRA.
53% of companies said that tax on long-term capital gains should be reduced
In KPMG’s survey, most companies expressed confidence that after domestic companies, now tax rates can be reduced for foreign companies as well. Also hoped that inheritance tax will not be announced. 50% of the companies surveyed believe that the tax exemption scope for exports under SEZ will be extended to companies starting after March 2020.
Expected to increase spending and investment due to decrease in personal income tax
The government reduced corporate tax in September. After that, speculation about personal income tax cuts had also started. However, the economy did not show as much improvement as was expected after the corporate tax cuts. In such a situation, the government can make big announcements in the budget to increase growth. Hitesh Gajaria, Co-Head (Taxation Practice) of KPMG, said that the highest expectation of all companies involved in the survey is the reduction in personal income tax.Due to this, expenditure and investment will be expected to increase.
