GCCI seeks direct tax relief ahead of Union Budget

NT NETWORK

 

PANAJI

With the Union Budget 2019-20 to be presented in a few days, Goa Chamber of Commerce and Industry (GCCI), representing the local industry, submitted a memorandum to the central government on Thursday requesting for several reliefs on the direct tax front.

The memorandum has asked for an increase in the basic exemption limit of income tax that has not been raised for several years. The exemption limit must be increased to Rs 3.5 lakh from the current Rs 2.5 lakh. For senior

citizens, the memorandum suggests that a new slab must be introduced for income between Rs seven lakh and Rs 12 lakh with a tax rate of 10 per cent.

For citizens who do not pay income tax but receive notices from the government asking them to file returns, the suggestion is for a single-click option on the department website wherein the citizens could give a simple declaration stating they are not liable to file returns. Such an option would result in better compliance among taxpayers, according to GCCI.

The demand is also for a revision in the exemption limit under leave encashment, standard deduction and housing loans. With an eye on improving cash flows to companies, the memorandum asks for lowering of the corporate tax rate to flat 25 per cent. Corporate tax, together with the dividend tax, is too high and lowering the tax rate would result in better cash flow, according to GCCI.

The memorandum to the Finance Minister asks for abolition of surcharge or cess, which is a regular feature in every Budget. “The surcharge and cess unnecessarily add to the compliance burden and do not in any way give satisfaction, as records are not available to show how and where such funds have been utilised. Such unwanted compliance leaves a very sad impression on the citizens of the country” is the viewpoint expressed in the pre-budget note.

In case of income computation and disclosure standards (ICDS) followed by companies, the trade body points out that at present companies have to follow different rules under corporate tax, income tax and indirect tax. “It increases the compliance burden without much benefit to the government and the tax collection is happening much before time and straining cash flows in the industry. Hence, the request is for ICDS to be withdrawn.”

It is mandatory for businesses to provide GST details in the income tax forms. The GCCI terms this as additional information that creates an unwanted duplication in the data and formats. The demand is for GST details to be withdrawn or at least postponed by three years.

Other reliefs mentioned in the memo are related to changes in Section 5A that deals with apportionment of income between spouses governed by the Portuguese Civil Code.

According to GCCI, the measures outlined in the memo would help the central government in providing a transparent administrative and tax system.