Finance Minister Nirmala Sitharaman will present the budget for fiscal year 2020-21 on 1 February 2020. Several big-ticket announcements on economic and tax measures are expected as part of the government’s larger objective of boosting economic growth.
In September 2019, the government had slashed tax rates to 15 per cent for new manufacturers and 22 per cent for existing companies from about 30 per cent to energise the Indian corporate sector. Similarly, last year also saw several big changes in relation to insolvency law and the Goods and Services Tax (GST).
In addition to the big-bang corporate tax cuts, there are several measures that the government could look at to reform the tax system, specifically with respect to simplification, reducing litigation and providing greater certainty to taxpayers. As a means to spur consumer demand and revitalise the economy, the government could potentially consider a cut in personal income-tax rates. Unlocking tax dues stuck in litigation could also be potential area of focus in this year’s budget.
Amongst the government’s other priorities are reviving infrastructure spending on roads and railways, clearance of all government dues in construction and other projects, providing for re-capitalisation of banks and non-banking financial companies and further simplification of GST.
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