New Delhi [India], January 27 (ANI): The Union Budget for 2021-22 due to be presented on February 1 is expected to introduce more relief measures as well as an economic stimulus package to support the economy in the wake of Covid-19 pandemic, professional services firm KPMG said on Wednesday.
It is set to provide India Inc with a clear roadmap out of the pandemic ridden economic distress towards higher economic growth, it added after capturing expectations of nearly 250 important stakeholders on various tax aspects.
With the government facing the prospect of significantly increased expenditure in coming year -- especially in the area of public health -- a large majority of the respondents (20 per cent) believe that the government's revenue needs can be met through increased collections fuelled by an economic recovery as well as improved technology-driven enforcement (49 per cent) rather than through the introduction of new taxes (2 per cent).
KPMG said a smaller number of respondents (29 per cent), however, expect a new Covid-19 cess. When it came to some measures the government could adopt to provide relief to the salaried class, many respondents (74 per cent) felt that an enhancement in standard deduction on salary income from existing Rs 50,000 should be considered.
A small majority of respondents (54 per cent) felt that faceless assessments and appeals in both direct and indirect taxes will improve efficiency and reduction in tax disputes. As to what the government can do more to help resolve disputes, a whopping (77 per cent) of respondents felt that a mediation scheme should be introduced in the Budget to enable negotiated settlements of tax disputes.
About 38 per cent respondents felt that the advanced pricing agreement (APA) programme had been effective in pre-empting and resolving key transfer pricing controversies. About 40 per cent respondents felt that the introduction of General Anti-Avoidance Rules (GAAR) and implementation of Multilateral Instrument (MLI) can lead to increase in tax disputes.
Given the financial impact of Covid-19 pandemic, a majority of respondents (47 per cent) expect an increase in the deduction with respect to provisions made towards non-performing assets by banks and non-banking finance companies. This will provide much-needed relief to those bracing for increased delinquencies on account of pandemic.
About 43 per cent respondents felt that a specific carve out for unlisted shares and securities from tax collected at source was also warranted.
When asked if respondents felt that the Goods and Services Tax (GST) regime was getting simplified over the last three years the response was divided. About 46 per cent believed that it was simplified and 42 said otherwise.
This could be due to multiple reasons such as various notifications, circulars being issued on a regular basis, number of increased compliances for multiple registrations, stringent provisions for credits availment which in turn leads to additional costs and time investments in the business.
Nearly two-thirds respondents (62 per cent) were comfortable with the digital compliance system introduced for GST. (ANI)