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Union Budget 2013: India Inc expects tax for super-rich in Budget

Source : BUSINESS_STANDARD
Last Updated: Wed, Feb 20, 2013 21:11 hrs
Labourers works at a factory of Sany Heavy Industry Co. Ltd on the outskirt of Shanghai

Top leaders of corporate India think Finance Minister P Chidambaram would take steps to tax the super-rich, introduce goods and service tax and raise tax rebates on home loans in the coming Budget, a survey has shown. A majority of them, however, don't expect the FM to take any steps on inheritance tax. According to a survey of chief executive officers, chief financial officers and other top officials of 300 companies by consulting firm Grant Thornton, 70 per cent of respondents expect the finance minister to introduce measures to widen personal income tax deductions, especially in home loans under section 80C of the Income Tax Act.

"Considering the increasing efforts of the government to widen the tax base, there is a sense that the government may levy a super-rich tax on exceptionally high earning income group," said Grant Thornton.

Sixty-two per cent of the respondents said the super-rich tax will be levied in the Budget. Almost 48 per cent of the respondents said the Budget will be investor-friendly, while another 40 per cent expect it to be revenue-friendly. (CEOs' Budget wishlist)

While 83 per cent of respondents do not expect major changes in the corporate taxation rates, they expect increase on the limits of tax savings investments especially linked to housing loan and principal repayments, the survey says.

Amidst new proposals, India Inc expects the government to clarify its taxation stand on "indirect transfers" like the Vodafone case and clarity on domestic transfer pricing regulations. In recent years, many top Indian and multinationals have received tax demands on transfer pricing. While multinational energy firm Shell has received a tax notice for notional gains while investing in its 100 per cent subsidiary in India, many Indian companies have received notices for earning a notional guarantee fee while giving guarantees to the special purpose vehicles set up for acquisitions abroad.

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