Double Income Tax exemption limit, continue with corporate deductions: EY

About 36% of the respondents felt that peak personal tax rate would be cut to 25%

Government should double the basic I-T exemption limit to Rs 5 lakh per year and continue with incentives and deductions to corporate houses for stimulating consumption demand and propel private investment post demonetisation, a EY survey said.

In a pre- Budget 2017 survey by tax consultant EY, an overwhelming 81.42 per cent of the respondents felt the corporate tax rate would be reduced to 25 per cent, from the present 30 per cent, excluding surcharge and cess.

In view of the push to 'Make in India', 72 per cent the survey respondents expected the government to continue with sector specific incentives/deductions.

However, majority of respondents felt that to reduce the corporate tax rate, it is imperative to phase out the tax exemptions to meet the fiscal target.

On whether the government would reduce personal tax rates or revise the threshold limit to put more disposable income in the hands of the common man to increase consumption and demand, the survey found that almost 60 per cent of the respondents want personal income tax rates be enhanced to Rs 5 lakh.

About 36 per cent of the respondents felt that peak personal tax rate would be cut to 25 per cent. Currently, income over Rs 10 lakh attract peak 30 per cent tax rate.

The survey includes the views of more than 200 CFOs and senior tax professionals from sectors including, automotive, consumer products, life sciences, infrastructure, technology, financial services and others.

"Our survey indicates that corporate India believes that reforms are around the corner. There is a clear expectation of certain tax benefits to individual tax payers so consumption expenditure can increase. Read more

Sector-wise key expectations from Budget 2017

Hike in income tax slab limits and reduction in corporate tax rate may be the highlight of Budget

With over a week left for Finance Minister Arun Jaitley to unveil the Budget 2017 on January 01, industry experts are being vocal about the expectations that they seek from the NDA-led government’s fourth Budget under the current term.

“We believe that the government is likely to take corrective measures which would offer remedy to the demonetisation wounds. In our opinion, increase in individual income tax slab limits and reduction in corporate tax rate is expected to be the highlight of the Budget 2017 in order to revive the consumption cycle,” said brokerage Angel Broking in a pre-Budget research note.

Below are sector-wise expectations from Angel Broking:

Auto

Auto sector was expected to report strong growth numbers in fiscal year 2017, however, the sudden cash crunch following demonetisation impacted the industry severely with November 2016 and December 2016 sales showing weakness across the segments. The industry expects the government to slash personal income tax rates so that consumers may have more disposable income to boost auto demand. It also expects the government to reduce excise duty on SUVs.

Banking sector

The Banking sector has been undergoing a painful stage in India. While large scale defaults have weakened the balance sheet of banks on one hand, lower credit growth is exerting cost pressure on the other. The brokerage expects the Budget to allocate more funds to infrastructure and focus on capex revival. “Higher allocation to infrastructure, housing and urban development will ease the stress level of corporate India’s balance sheet,” it said. The brokerage also wants government to hike capital infusion in public sector banks to improve their capital adequacy position.

FMCG

FMCG sector has not witnessed any significant revenue growth for the last two years owing to slowdown in rural demand. Demonetisation has only aggravated the pain. The brokerage expects more funds into marquee programs such as the Pradhan Mantri Krishi Sinchai Yojana, Rashtriya Krishi Vikas Yojana, Pradhan Mantri Gram Sadak Yojana etc. It also wants the government to increase the income tax slabs to leave more money in the hands of consumers. read more.

Budget 2017 wishlist: Expectations from the real estate sector

Budget 2017 to augur well for real estate sector, buyers: Abhishek Goenka

Further changes with regard to real estate investment trusts (REITs) and the deduction for interest on self-occupied property being increased up to Rs 5 lakh are expected by the real estate sector in Budget 2017, said Abhishek Goenka, partner (real estate), PwC.

Goenka was responding to questions during the Business Standard live chat on what the real estate sector should expect from the coming Budget.

Further, the sector is also expecting a change in the tax deduction limit on housing loans. Goenka said that the sector expects that the limit of Rs 200,000 would be increased to Rs 500,000. This would positively impact the sector.

Good for buyers

The Budget is expected to increase the deduction for interest payments and also reintroduce the standard deduction, said Goenka, adding that these should make the effective cost of borrowing cheaper. With fall in interest rates also, this would overall augur well for home buyers, he said.

GST to have an overall positive impact on sector

The goods and services tax (GST) should have an overall positive impact on the real estate sector, said Goenka, adding that the duplicity of value-added tax and service tax will be eliminated under GST. However, Goenka said that some of the restrictions on credit that are in the model draft law need to be addressed and there should be a seamless flow of credit in order for the sector to truly benefit. Read more

Railways' 'Mission 41K' to save energy worth Rs 41,000 cr

The ministry plans to achieve this target by doubling the current pace of electrification

Budget 2017 : Union Railway Minister Suresh Prabhu today unveiled 'Mission 41K' to save Rs 41,000 crore on the Indian Railways' expenditure on energy consumption over the next 10 years.

This target will be achieved by taking a slew of measures which include moving 90 per cent of traffic to electric traction over diesel. Presently, this is at 50 per cent of the total rail traffic.

The ministry plans to achieve this target by doubling the current pace of electrification, Railway Board Chairman A K Mittal said in an official statement.

The railways also aim to procure more and more electricity at cheaper rates through open market instead of sourcing it through DISCOMs and thereby hopes to save as much as 25 per cent on its energy expenses.

New technologies are also being explored to bring down electric consumption.

In the last Budget the railways have already set a target of generating 1000 MW of solar power and 200 MW of wind energy.

Indian Railways consumed over 18.25 billion units of electrical energy for its traction and non-traction application during 2014-2015 for which it paid a total of Rs 12,635 crore. For diesel traction it spent Rs 18,586 crore in the same period.

The launch of this programme was undertaken at a Roundtable Discussion on Energy Initiatives of Indian Railways with external stakeholders.

Among those who were present were Indian Oil Corporation, Adani Power, Reliance Power, Suzlon Energy Ltd, TERI, and CII.

Budget 2017 wishlist: Five expectations from infrastructure sector

Finance Minister Arun Jaitley might announce a third straight year of record capital spending

The Union Budget 2017 is expected to give an impetus to infrastructure sector in order to boost industrial growth amid global slowdown and lower corporate spending at home.

A Business Standard report said Finance Minister Arun Jaitley might announce a third straight year of record capital spending, which could be 12-14% higher than the 2016-17 Budget Estimates of Rs 2.47 lakh crore. That would put the 2017-18 capital expenditure at nearly Rs 2.8 lakh crore. CLICK HERE FOR THE FULL REPORT about Budget 2017 : Big infra push likely to counter demonetisation impact

From more avenues to fund stuck projects, tax holidays to discount in lending rates, below are five things that Sandeep Upadhyay, Managing Director & CEO, Centrum Infrastructure Advisory expect from the Budget 2017:

1) Given the reluctance of banks to fund infrastructure projects due to increasing non-performing assets (NPAs) in the sector it is imperative that we should have more number of specialised infrastructure financing institutions which as of now is just confined to entities like IIFCL, IREDA, PFC and REC etc. These specialised financing institutions could serve as the much needed complimentary sources of funding infrastructure projects needing long-term funding at subsidised rate.

2) While there had been some traction in the M&A activity for operational assets there has been limited success around resolving the financing issues for the stuck infrastructure projects requiring last mile funding. I expect the Finance Ministry to come out with a dedicated corpus to fund the stuck projects either in the form of a special situations fund or carve a portion out of dedicated funds like National Investment and Infrastructure Fund (NIIF) to immediately fund such infrastructure projects. Once such stuck assets get operational, it will also lead to a gradual but definitive easing of NPAs of the banks. I see this segment as a low-hanging fruit for the government to be addressed on an urgent basis, which could also improve there conversion rates in sectors such as roads and highways where steep targets have been already haunting the Ministry.

3) Minimum Alternate Tax (MAT) is working out to be quite regressive for infrastructure projects specifically at the early stages of projects post commissioning. This is due to the inherent challenge faced by infrastructure projects typically characterised with a gradual ramp-up of revenues. I expect the MAT rate to either reduce or the FM Jaitley considering a lesser alternate form of tax for long gestation infrastructure projects. (read more)

Children among many feared dead in Italy avalanche

Several children were among more than 25 people unaccounted for, feared dead, today after an avalanche engulfed a mountain hotel in earthquake-ravaged central Italy.

The national civil protection agency said the Hotel Rigopiano had suffered a direct hit by a two-metre high wall of snow yesterday.

Emergency services were struggling to get ambulances and excavation equipment to the remote site with the first snow plough only arriving just before midday.

Italian broadcasters showed images of piles of masonry and rubble inside the hotel, which had been moved some ten metres from its original location by the force of the snow.

Local officials confirmed that one body had been recovered from the ruins and that two guests who were not inside when the avalanche struck had been saved.

Civil protection chief Fabrizio Curcio said there had been around 30 guests and staff at the small ski hotel on the eastern lower slopes of the Gran Sasso mountain when the first of four powerful tremors rattled the region on Wednesday morning.

Francesco Provolo, the head of the Pescara province where the disaster occurred, said there had been around 20 people staying at the hotel, including "several children" along with seven or eight staff.

Specialist mountain police who had reached the hotel on skis or by helicopter overnight had begun trying to move the rubble with spades.

They were quoted as saying there were no signs of life inside the building while one of their commanding officers told reporters: "There are many dead."

Ambulances were blocked by two metres of snow in the nearest village, Farindola, some nine kilometres away, according to the civil protection agency. Read more

Here's how Arun Jaitley make it good Budget for the middle class

The Union Budget 2017-18 will be presented on February 1. There are hopes of many attached to it. However, middle class has it's own expectations, with tax slabs and home loan subventions, reports Economic Times.

If the minimum limit of taxable income is increased, it will not only benefit taxpayers at the bottom but also middle-class youth who are starting out as employees. Currently it is Rs 2.5 lakh.

A restructuring of tax slabs will be a big relief for the urban middle class. Currently, 10 per cent tax is charged on annual income of Rs 2.5 lakh to Rs 5 lakh, 20 per cent on Rs 5 lakh to Rs 10 lakh and 30 per cent on income above Rs 10 lakh. The first two slabs can be widened or taxed at a lower rate.

Deduction under Section 80C of the I-T Act is allowed from Rs 1,50,000 to Rs 3,00,000. Increasing the limit can boost household savings which can ultimately get invested and power growth.

Salaried employees enjoy exemption from tax on several allowances/benefits that the employer provides such as children's education, conveyance, medical reimbursement, house rent and leave travel.

Arun Jaitley can change the existing exemption limit of Rs 3, 00,000 for senior citizens (60 years to less than 80 years) and Rs 5, 00,000 for super senior citizens (80 years and above) to Rs 4,00,000 and Rs 6,50,000 respectively.

The subventions on home loans offered by PM Modi in his New Year's Eve speech are targeted at buyers in Tier 3 cities. In the upcoming Budget, the finance minister can offer interest subvention on larger amounts of loan which will benefit buyers in big cities and other urban areas.