Union Budget 2022 tax expectations: Rationalisation of corporate tax compliances and tax relief to individual taxpayers tops the expectation list
The Union Budget 2022 is fast approaching and like every year, India Inc is looking forward to the announcements of tax proposals. To gauge the market sentiments and better understand the expectations from Union Budget 2022, Grant Thornton Bharat conducted a tax pre-budget expectations survey. The survey report captures the hopes and aspirations of industry experts, individual taxpayers and corporate India.
Commenting on the survey results, Vikas Vasal, National Managing Partner - Tax, Grant Thornton Bharat said, “It’s difficult for the government to maintain a fine balance between taxpayers' expectations and fiscal prudence. Households adversely impacted by the pandemic expect some measures that would leave more cash in hand to bring some cheer amidst all the gloom. Businesses expect rationalisation of compliances to provide impetus to ease of doing business. Young investors are looking for clarity on taxation of cryptocurrencies and similar digital transactions.”
The survey results highlight a high level of optimism with respect to resilience in the economy. 81% respondents expect that the third wave of the pandemic will not cause major disruptions and the economy will continue to grow in 2022.
A majority of the respondents believe that personal taxation requires the most reforms in the upcoming budget. 57% of respondents chose personal taxation as the top area for reforms, followed by customs and GST which stood at 25%. Overall, 90% of respondents also feel that the government should either increase section 80C deduction limit or the standard deduction in the upcoming budget.
The survey also highlights the expectations for overall reduction in compliance burden on corporate taxpayers. 39% respondents consider overall reduction in compliance obligations as the key area that needs immediate attention. This is followed by 28% respondents who feel that the 15% corporate tax rate should be extended to all sectors (including the service sector).
76% respondents want the government to announce another dispute resolution scheme to resolve pending indirect tax litigations. Considering the success of earlier dispute resolution scheme, it would be very helpful if the government comes out with an amnesty scheme for legacy laws as well as for the initial period of GST. The scheme will be beneficial for both the government as well as the taxpayers.