On the direct tax front, tax relief has come for small tax payers
The biggest takeaway of the Union Budget is adherence to fiscal consolidation with projected fiscal deficit at 3.5 per cent despite the pressure of higher expenditure through 7th Pay Commission and OROP outlays. Thus the government has successfully met the twin objective of balancing both consumer expectations of higher disposable income as well as investor expectations of fiscal prudence and low inflation.
On the direct tax front, tax relief has come for small tax payers. Also, the government has taken the first step in the promised agenda of a gradual reduction in corporate tax by phasing out various exemptions this year. To incentivise ‘Make in India’, growth and employment thereby, new start-ups have been granted specialised provisions such as 100 per cent deduction of profits for 3 out of 5 years along with a lower corporate tax rate at 25 per cent.
From the perspective of the common man, real- estate sector related steps will generate significant opportunities for large forward and backward linkages through the creation of demand in input sectors to related services.
There also are significant measures announced for small businessmen (SME/MSME) towards ease of doing business in India. These bold steps will further bolster the economy.