5 Tax Proposals Budget 2012 should usher in

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With the global economic recovery still on a knife's edge, some of the major European countries battling debt default, coupled with multiple domestic challenges - balancing growth and inflation, reducing the shooting fiscal deficit to acceptable levels and above all, generating adequate tax revenues in this tough environment to fund the ever increasing subsidy bill. Union Budget 2012 is truly going to be a tightrope walk for Finance Minister Pranab Mukherjee. So what are the key tax proposals that the FM will introduce in the Budget? Let us hear what some of the top tax professionals expect from the Budget..


Comments


Mr. Sunil Kapadia
Partner
Ernst & Young
  1. Increase incentives to individuals/businesses when directed towards fresh investments in infrastructure/new projects or which enable new employment generation.  This can have a multiplier effect of increase tax collections (indirect) from production/use of capital goods or consumer goods.
  2. Overhaul the Tax Assessment/Appellate provisions for better transperancy, fairness and increasing faith of tax payers.  This is certainly not a good year for introducing GAAR especially since businesses are undergoing severe pain and constraints due to inflation/high interest rates, etc.  If necessary to introduce, there should be substantial safeguards/guidelines to avoid litigation.
  3. Need to increase tax base as current tax payers are to some extent already stretched; various reports seem to suggest a huge untapped potential of bringing into the tax net new assessees.  This can also achieve revenue expansion objectives.
  4. Effectiveness and independence of DRP
  5. Promoting skill sets of salaried class is becoming essential, hence need to provide a sizable deduction for higher education will help qualitative improvement of India's skill set.