Don't see any big bang announcements on personal tax in Budget, says Frank Dsouza of PwC
It will take at least one more year for the government to completely understand the exact impact of demonetisation on tax collection
The Union Budget 2017 is unlikely to have any big bang announcements on the personal tax and corporate tax front as the government will need time until next year to analyse the data about the deposits the banks have amassed after the demonetisation, said Frank Dsouza, partner - tax and regulatory services, PricewaterhouseCoopers.
"It is just one month after the end of the deadline for making deposits. Also there are still people going to the RBI to make deposits. So from that perspective a reaction in this budget may not happen. There could be a few sops coming out given the hardships the common man has suffered. I would say we will have to wait until next budget for any path breaking, big ticket announcement," he said in a video discussion on taxes hosted by Firstpost.
The government announced the demonetisation of Rs 500 and Rs 1,000 notes on 8 November and those holding the banned notes were given time until 30 December for depositing them at the banks. For those who were outside India during the period the RBI counters will remain open to make deposits until 31 March.
After the demonetisation, which resulted in huge deposits at the banks, there has been speculation that the government will reduce the personal income tax in order to compensate for the hardships the common man suffered. There has been a view a reduction of the tax burden on individuals and corporates will give a consumption boost and encourage investments which will help weather the demonetisation-induced slowdown.
However, D'Souza does not expect any major announcement in the upcoming budget. In the case of corporate tax, the government is unlikely to move away from the roadmap announced last year he said.
On the GST front the government is likely to some announcement on the policy front, said Bhupender Singh, director - indirect tax with PwC.
"Our expectation is that there could be some policy announcements on the GST front in this Budget. There is unlikely to be GST related tax announcements. It could be more like policy announcements," he said adding all other important decisions are regarding the GST will be taken by the GST Council.
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