Tax breaks for women, sops for microfinace, travel sectors among demands

With the upcoming Union Price range 2024, or interim price range, set to be unveiled on February 1 forward of the overall elections, sectors like microfinance and journey, and naturally particular person taxpayers, are wanting ahead to some optimistic breaks.

The pre-Price range expectations vary from extra tax sops for people to further advantages for ladies (to encourage investments), measures to help area of interest sectors served by microfinance, and elimination of the disparity between Indian and abroad on-line journey businesses (OTAs) for TCS (tax collected at supply) functions, and much more.

Listed below are some vital voices that need to be heard within the run-up to Price range 2024:

Microfinance

Dr Alok Misra, CEO and Director of Microfinance Trade Community (MFIN), the trade affiliation for microfinance and an RBI-recognised self-regulatory organisation stated, “RBI-regulated microfinance establishments as of date present collateral-free doorstep credit score to 71 million low-income ladies purchasers. The contribution of microfinance to the inclusive development story of India requires some important coverage help.”

He added, “First, MFIN has been advocating for devoted funding help for microfinance establishments with a particular give attention to small- and medium-sized establishments. Secondly, although the loans are unsecured, there isn’t a appropriate assured mechanism out there for the sector. A sector-suited assure scheme will go a great distance in boosting the credit standing of microfinance establishments in addition to their skill to broaden to tough areas.”

Company tax and sops for ladies

Equally, Harsh Gahlaut, Co-Founder and CEO of FinEdge, outlined his expectations: “Additional discount in company tax charges, now that direct and oblique tax collections are displaying a strong pattern. This might be preserving in step with the glide path the federal government has spoken about up to now. A tax discount at this level would encourage enterprise sentiment as a complete and could be an funding towards stronger tax collections sooner or later. Decreasing double tax whammy on dividends paid to shareholders.

“This double taxation is a dampener for return on investments (RoI) as first, the enterprise pays tax on income after which pays dividend distribution tax as soon as once more when the dividend is paid out. Buyers who’ve put up danger capital whereas investing in enterprise also needs to have the ability to withdraw income as ease of doing enterprise with out having to pay taxes twice.

“Lastly, further sops or incentives for ladies to speculate: This might be within the type of tax financial savings over and above the present buildings and would allow a structural change within the social cloth of the nation. Such sops exist in actual property (decrease registration expenses) and have helped many ladies in having registered properties of their identify.”

Journey sector

In terms of the expectations of the journey and tourism trade, Rajesh Magow, Co-Founder and Group CEO of MakeMyTrip, stated, “Aviation turbine gas (ATF) accounts for a good portion of the airline’s operational prices. Whereas the central authorities has inspired state governments to cut back VAT on ATF, the finance minister can think about a broader coverage framework that not directly impacts the price of ATF, like central excise duties and customs duties.

“The discount in ATF (costs) may catalyse a domino impact, growing air journey frequency, bolstering airport revenues, and enhancing connectivity to numerous vacationer locations. Improved accessibility can considerably increase tourism, benefiting native economies and contributing to nationwide financial development.

“Studying from our Asian neighbours, implementing visa-free entry for vacationers from India’s high 15 feeder markets will help considerably enhance overseas vacationer arrivals. This initiative is not going to solely put India on a aggressive footing within the world tourism market but additionally foster a reciprocal atmosphere.”

Magow additional stated, “The federal government may encourage companies to speculate their CSR funds in creating and enhancing vacationer locations. This strategy can result in creating new sights and upgrading current ones whereas providing tax advantages to the companies concerned. A weighted deduction below revenue tax together with enter tax credit score below GST on CSR funds deployed to enhance vacationer locations will garner bigger participation from the non-public sector. Such a symbiotic relationship not solely helps protect vacationer websites but additionally ensures all-around sustainable growth.”

“Additionally, (the federal government ought to) consider providing tax incentives to accommodations and homestays for adopting sustainable practices aligned with India’s dedication to the United Nations Sustainable Growth Targets, notably SDG 11 (Sustainable Cities and Communities) and SDG 13 (Local weather Motion). By providing tax incentives that promote eco-friendly measures within the tourism sector, akin to energy-efficient lighting, water-saving units, and waste-reduction practices, the finance minister will likely be encouraging the trade to contribute to those world objectives,” Magow identified.

“Most significantly, the journey trade has pitched that the federal government ought to take this chance to take away all disparities between Indian and abroad on-line journey businesses (OTAs), in addition to completely different modes of fee. For instance, OTAs working a everlasting institution in India are mandated to gather 20% TCS for spends above ₹7 lakh by a person in a monetary yr on abroad journey, together with tour packages.

“In distinction, the foreign-based OTAs don’t acquire TCS, and the non-applicability of GST or direct taxes permits them to supply decrease prices to Indian residents. The differential laws, which give an unfair benefit to foreign-based entities, must be addressed,” Magow added.

It stays to be seen whether or not the interim price range will stay as much as these excessive hopes because the finance minster has already tried to show down the amount of expectations considerably.