MoD / Raksha Mantralaya / Government Recommendation and Appreciation Letter

Topic: Submitted Ideas and Suggestions for Union Budget 2020 - 2021

15^th January 2020

To,

Smt. Nirmala Sitharaman,

The Hon’ble Minister of Finance
Government of India

1.      Lower tax rates

a.       Income up to Rs. 5 lakh should be made exempt from tax. Peak rate of 30% should be made applicable on the income of Rs. 20 lakhs and above.

b.      We may see a tax of 10% for the people with annual income between Rs. 5 lakhs to Rs. 10 lakhs, individuals earning between Rs. 10 lakhs to Rs. 20 lakhs may get to pay tax @ 20%.

2.      Dividend Distribution Tax (DDT) Issues: 

Replace dividend distribution tax (DDT) with classical system of dividend taxation: There is a need to reintroduce the classical tax system of dividend taxation in the hands of the shareholders with protection for small shareholders and avoiding cascading impact of inter-corporate dividends.

For the corporates, there are suggestions that the DDT be reduced from 20 per cent to 10 per cent.

3.      Personal tax Reform and honest tax payer benefit scheme.

4.      Senior Citizen Benefit: Give a special rate of interest to Senior Citizens with a minimum of 9% to 10% and fix that limit to 25 lakhs to help people elder people.

5.      Land reforms: Industry groups have asked for sweeping land reforms in India that allows for land aggregation and private sector investment in agriculture.

6.      Export incentives: While India’s export industry hasn’t performed empathetically, there are suggestions to provide enhanced incentives to boost the export sector.

7.      Interest rates: 

While the common man has asked for higher interest rates for savings accounts, representatives of financial sector have also made similar demands.

Interest on home loan deduction for interest on home loan available is Rs. 2 lakhs which was last revised in 2014. Since then the property prices have gone up significantly. Therefore, it would be prudent to raise this deduction limit to Rs. 5 lakhs so that homebuyers can take benefit of this tax break.

8.      Agriculture sector: 

a.       As suggested by CII, The Confederation of Indian Industry (CII) urged the government to enhance private investment in the food processing sector and rural start-ups.

b.      To stimulate investments by venture capital and private equity firms in agri startup businesses, he proposed that this sector be treated as a special category to lower the tax rate on investments in order to compensate for longer business maturity time and risks associated.

c.       The investment for micro-irrigation and solar pumps should be tripled and GST on processed foods to be reduced to 5%. Also 6,000 smart census towns should be developed instead of smart cities.

d.      There should be minimum GST on every farm inputs such as fertilisers.

e.       Support for Agri business model with latest technology and this will help to boost income level. Agri forum like Shramrajya Parishad or Atma Team (Maharashtra) should be involved here for more participative ideas.

9.      Healthcare: 

Healthcare allocation: A large portion of budgetary allocation should be reserved for spending on primary health and on establishing the 1,50,000 health and wellness centres (announced under Ayushman Bharat) which will help to reduce the disease burden.

While many common citizens have asked for tax exemptions on healthcare for the elderly, industry bodies like FICCI have made some radical suggestions, including raising tax exemption on preventive health check-ups from Rs 5,000 to Rs 50,000.

10.  Education: 

a.       Education is very important for a family in India. It is high time that incentives should be given specifically to this sector.

b.      Government should consider removing tuition fee from Section 80C and a separate deduction should be given for education expenses.

c.       Further Budget it should give tax benefit to taxpayers who invest in saving instruments of children education

d.      Some common-man demands include regulation of private school fees and other arbitrary fees imposed by higher educational institutions in the private sector. And make free education till 12th class despite income level as we know, education is investment in nation building program. Gurukul model kind of education scheme should be promoted with balance of moral science and school curriculum together.

11.  MSME support: I had got opportunity to work with Vidharbh Federation President and understand SME requirement closely. I emphasis here on SME reform in coming budget and promote more swayamsidha (Amravati District MIDC) kind of startup forum. To achieve this please find below points:

1.      Instead of elaborate formalities increase the ceiling limit of GST to 200 lakhs and levy 5% (2.5 + 2.5) based on turnover as it was used to be at VAT for 75 lakhs previously.
2. Increase the Tax audit limit from 200 lakhs to 300 lakhs for all and have 3 slabs in the tax i.e. 8% up to 100 lakhs 6% up to 200 lakhs and 5% up to 300 lakhs which will bring more people under tax bracket under this head
3. For allied activities of Agriculture instead of 0% GST you remove from the submission of the GST
4. Pleases rationalizes the TDS inviting more suggestions 

2.      Rationalisation SME /MSME tax structure for corporates will provide a big breakthrough to small entrepreneurs, formalise the economy, improve retained earnings for small entrepreneurs, increase surplus for investments for millions of small entrepreneurs, and make them more credit-eligible, spur the economy and create jobs at the bottom of the pyramid.  Give substantial benefits to micro enterprises and self-employed professionals. This structure will benefit millions of small players, level the playing field with large enterprises who enjoy benefits of scale, and lower interest rates and create employment at the bottom of the pyramid, i.e. at MSME level.

12.  Customs Duty: Indian manufacturers are facing a lot of hardships in competing with the cheap imported cells and modules as they are not subject to customs duty. Imposing of customs duty on these products will enhance the operational capability of the Indian manufacturers.

Keywords:

#IncomeTax #Finance #Farmers #Agriculture #Health #Education #Environment #WaterConservation #GST #Employment #Entrepreneurship #Railways #Infrastructure #Others