Home BUSINESS Budget 2022: what does the industry want # 2

Budget 2022: what does the industry want # 2

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Finance Minister Nirmala Sitharaman will present the Union Budget 2022-23 in the parliament on 1 Feb 2022

All eyes are glued to Finance Minister Nirmala Sitharaman’s Union Budget 2022-23. The biggest question everyone wants to know is – would Nirmala Sitharaman succeed in meeting the hopes and expectations of everyone. Here is what the industry expects:   

Vikram Subburaj Co-Founder and CEO of Giottus Cryptocurrency Exchange 

The upcoming budget is a good opportunity to start a dialogue around various undefined aspects of the asset class.  We expect well-defined regulations around crypto and blockchain technology to drive confidence in the ecosystem. We hope the regulations are forward-thinking setting precedence to the developing world with regards to thought leadership and industry development. 

Businesses and individuals would then be able to operate with much clarity as the ambiguity around taxation is cleared and crypto assets get defined appropriately under various taxation laws. 

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This is a much-nuanced field with new innovations evolving on a day-to-day basis and hence needs a generic structure to ensure it gives enough space for innovation to foster. We hope the crypto startups that have set their base abroad get back to India and focus on creating the next set of jobs for the innovative and passionate youth in the nation.

A Ganesan, Group Vice Chairman, Neuberg Diagnostics

Personal Income Tax reduction: There has been no increase in the personal income tax threshold for the last several years.  The threshold limit has to be increased to Rs 5 lacs for less than 60 years, Rs 6 lacs for senior citizens and Rs 8 lacs for super senior citizens. Section 115 BAC has to be deleted.

Increase medical insurance premium deduction: In view of the Covid pandemic, which is threatening to become endemic, the insurance companies have increased the premium quietly and in view of the above the insurance premium deduction has to be appropriately increased for all classes.

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Medical expenditure deduction:  Currently, those who do not have a healthcare cover, are entitled to claim up to Rs 50,000 towards medical expenditure incurred. There are a number of people, who do not have a health cover, particularly, those above 60 years. This section of people has again dealt with a body blow due to the pandemic. In view of the above, this limit has to be increased substantially or at least up to Rs 1,00,000.

Persons having Income above Rs 50 lacs – To furnish Assets / Liability statement: This requirement was introduced almost 7 to 8 years back. With income levels going up to salaried class, those having taxable income above Rs 50 lacs (salaried class) have gone up substantially. Again, the AL statement actually does not serve any major purpose. Hence, this requirement has to be done away with for at least salaried persons and the limit has to be increased Rs 1 crore for others.

The penalty under section 270 A – 200% is very harsh. The definition of misreporting/wrong reporting can be interpreted in either way with the result, taxpayers who never had any intention to conceal are facing huge penalties. These high-pitched penalty assessments are likely to be litigated for a long and the intent of this section might get diluted. The penalty cannot be more than 100% of tax sought to be evaded.

MSME cash flow crisis: MSMEs are still facing difficulties as regards receivable payments and even Government departments (state as well as Central) are not respecting the MSME laws. In fact, the maximum defaulters are only public sector undertakings and government departments. The Government has to introduce stiffer penalties for defaulters so that the MSMEs get adequate protection from the cash flow crisis.

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GST reduction: GST has to be reduced significantly across all products and services, to spur consumer spending and petroleum products have to be brought under GST.  Healthcare services have to be brought under the GST regime with a 1% levy so that they are able to avail the input credit available, which go to waste now, resulting in a higher cost of services. If this is done, the overall cost of healthcare services will actually come down benefitting a larger section of the people.

Shrey Aeren, Managing Director & Country Head at Berkshire Hathaway HomeServices Orenda India 

The infrastructure industry status to be given to real estate, so that it can raise money from financial institutions easily i.e. raise capital at a lower rate, attract equity investments and enable debt refinancing for builders.

Reduction on GST paid on input materials: which will also help developers retain assets for rentals/leasing to set off against GST on rent from the completed property.

The home loan deduction limit under section 24 is from 2 lacs to 5 lacs i.e. currently, concession can be availed in Income tax on up to 2Lacs paid as interest in home loans, this should be revised to 5lacs.

Affordable housing should be defined as per cost of house/construction, besides carpet area city-wise i.e. in a city like Mumbai, affordable housing should be up to 85 lacs, as land price and construction cost are higher. 

Extend the benefit of affordable housing beyond 2022.

Bring co-working spaces into a 2% TDS slab as in the case of services from the present 10%. This will help them in cash flow management.

Ritesh Mehta, Head of Finance, Toch AI 

India is seeing a massive boom in the technology sector with enterprising start-ups pushing the boundaries to come up with innovative solutions that can be used in India and also globally. Early-stage startups procuring services from overseas providers pay 18% GST under the reverse-charge mechanism but are unable to claim input tax credits as they often have little to no revenues. It would be great to see an exemption from having to pay GST under the reverse-charge mechanism up to a certain revenue threshold. For instance, all DPIIT-registered startups with less than Rs 10 crore in annual revenue should be offered an exemption from paying the 18%. This will be a great motivator for early-stage start-ups.

Dr Akhil Shahani, MD and CEO Thadomal Shahani Centre for Management, Shahani Group

The union budget can bridge the education-employability gap by reducing the GST rate for educational technology & ancillary services from 18% to at least 5%. It should allow private investors to set up schools & colleges with the ability to generate profits and equity returns. It should also allow foreign educational institutions to easily set up campuses in India, to promote healthy competition with local players. Collateral requirements for school/college educational loans should be reduced, along with interest rates, by public sector banks, to allow more families to afford the fees of quality institutions. Special sops need to be given for teacher training colleges, to enable them to expand & provide higher quality talent to institutions. None of these suggestions requires additional funds from the government, just need a practical and holistic approach to opening up education regulations.

Sahil Chopra, Founder & CEO- iCubesWire 

Ever since the pandemic started, we have transformed our way to work and handling our business. From rapidly shrinking budgets to events’ going virtual to the new hybrid workforce, we have surely come a long way. Considering a lot more similar factors, this year we are expecting a major push in the digital marketing and advertising sector. From higher rates for digital media buying to challenges in bringing the right talent on board to engaging increasingly digitally savvy buyers, we have seen higher customer expectations and so considering it as a base we expect the government to bring new schemes that will eventually enhance the marketers skill sets to improve their team’s effectiveness without creating burnout. Raising marketing budgets to pre-COVID levels (if not higher) will be crucial. A lot of entrepreneurs are hoping for relief measures in the form of credit lending. Subsidies at ground level will make entrepreneurs feel protected & safe. We also expect to see decisions to fuel the growth of startups in several domains. If the right incentives on both the marketers’ and consumers’ sides are announced in this budget session, it would push the quick and wide adoption of digital advertising and marketing.

Sanjay Shah, Chief Operating Officer, Wadhwani Foundation

The Indian startup ecosystem skyrocketed in 2021 to become the third-largest globally with 78 unicorns, 8 IPOs and a 3x increase in total funding over last year to touch $39 billion. However, despite a stellar show, two challenges are predominant in the Indian startup space; (1) many unicorns in India lack a compelling revenue base and require an infusion of cash flow for survival (2) the need to accelerate their digital transformation with technology and platforms. Hence, in 2022, the government should look at assisting startups through policies and support mechanisms towards domestic capital participation, favourable investment climate in tier 2 and tier 3 cities, incentives to set up incubators in every state, tax exemptions in foreign direct investments, and a high focus on startup infrastructure development. This will also help in the globalisation of Indian startups as ~42% of them are planning to go global in 2022.”

Srinath Mukherji, Co-Founder, SANA Insurance Brokers Pvt. Ltd. (SANA. Insure)

Main budget idea – Reduce GST on health insurance, since medical services have either Nil GST or at a lower rate. It is a disincentive for the customer to take much-needed health insurance.  That amount could instead be utilized for buying higher coverage, thus getting full value for money and making health insurance more affordable for buyers.

Satish Shukla, Co-founder & Head- HR & Marketing, Addverb Technologies

2021 has been the year of the unicorns. The time taken by startups to become a unicorn has also decreased. These unicorns have created employment and have contributed to creating new commerce and economy. At present, the tax rate for capital gain on unlisted shares is different vis a vis the listed shares resulting in higher tax outflow for startup founders and early-stage investors. They could be rationalized at par with listed securities to bring parity,  Also, with the new commerce, the gig economy has been on the rise with jobs being created through e-commerce firms. Bringing these new kinds of jobs under the minimum wages ambit shall provide a good social security cover to this vulnerable set of gig workers like delivery boys etc.

Subramanyam S, CEO Of AscentHR 

Hit by the pandemic over the last two years, Income in the hands of individuals be it salaried or otherwise, except the IT / ITES / Healthcare employees,  has shrunk owing to lesser opportunities combined with an average appraisal(s). This trend has led to reduced earnings and increased expenses causing a dent in savings potential which was hitherto a big contributor to the Indian economy. Given the circumstances, Govt must continue the option of both the old and new regimes and encourage small savings for tax purposes and possibly put more cash in the hands of individuals through more tax saving options or an increase of standard deduction. In addition, the government should consider incentivizing employers promoting WFH to facilitate better growth of Tier II and Tier III cities or engaging more GIG/Platform workers which reduce gender bias and enhances options before an individual in ways he can improve earnings. Lastly, the much talked about labour reforms must see the light of the day for facilitating better and uniform practices across India enabling a business-friendly approach with emphasis on digital/faceless governance leading to lower corruption as well as easy ways of managing the business.

Also Read:

Budget 2022: what does the industry want #1

Real estate pins hope on Union Budget 2022-23

Sunil Dahiya, Executive VP, Wadhwani Opportunity at Wadhwani Foundation

Training, upskilling, and reskilling talents from freshers to veterans is the need of the hour for India in 2022. We recommend the government to focus on three things to reposition India from being the value-oriented talent pool to a demandable one; (1) allocate budget for specialized, government-led, training and skilling centres (2) focus on vocational and experiential led employment openings across industries, and (3) redefine the hiring and retention policies for companies across India by mandating a minimum wage policy for each industry and skill. Budget allocations specifically aimed at reskilling and upskilling for family-supporting jobs will be a game-changer for the skill development ecosystem in India.

Samir Sathe, Executive VP, Wadhwani Advantage at Wadhwani Foundation

We would like the government to take swift measures to prevent potential inflation, create an industry-based innovation capital fund, create a national and state-funded task force of experts, advisors and implementation partners, to transform the weak enterprises into strong and stronger ones into globally competitive enterprises.

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Taazakhabar News Bureau
Taazakhabar News Bureau is a team of seasoned journalists led by Neeraj Mahajan. Trusted by millions readers worldwide.

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