Not to hold post-Budget meets this time, opt for webcasts
Call it the Direct Taxes Code (DTC) effect. The Indian arms of global auditing and tax consultancy firms such as PriceWaterhouseCooper (PwC) and Ernst & Young are not having their customary post-Budget conferences across cities this time. The reason: The impending DTC has reduced expectations of any interim big-ticket tax reform.
Instead of the usual meetings, addressed by their tax experts, the firms have organised webcasts to explain the Budget proposals to their clients.
The importance of taxation in the Budget has been declining over the last several years as the document becomes more about broader policy directions. With DTC expected next year, we don’t expect any major legislative changes on the tax front, says an expert associated with one of the leading audit firms.
“We are not expecting any major direct or indirect tax announcements as DTC and GST (goods and service tax) are on the anvil,” said Shyamal Mukherjee, joint leader, tax and regulatory services, PwC.
The firms, however, say the decision to cancel post-Budget events and opt for webcasts was a techno-savvy move independent of DTC. “All our clients will be linked through the internet and can watch the webcast from 5:30 pm to 7 pm on Monday,” said Sudhir Kapadia, tax market leader, E&Y.
KPMG, another global consultancy firm, has also opted for a web-based conference. “It’s a matter of convenience. Instead of engaging two experts each in every major city, we can have just two-three experts speak to our clients through webcast,” an expert said.
The general feeling is that Finance Minister Pranab Mukherjee, while avoiding any major legislative changes, could introduce minor changes on the direct tax front. “It will not be prudent to make any major changes while the matter (DTC Bill) is being considered by a parliamentary panel,” said an expert.
The DTC Bill has proposed to raise the exemption limit from the present Rs 1.6 lakh to Rs 2 lakh. Hence, 10 per cent tax is proposed on income of Rs 2-5 lakh. The present 10 per cent slab is Rs 1.6-5 lakh.
The Bill proposes 20 per cent tax on income above Rs 5 lakh up to Rs 10 lakh as against the present upper limit of Rs 8 lakh. The Bill, pending with the standing committee, has suggested imposition of the peak rate of 30 per cent on income above Rs 10 lakh, as against Rs 8 lakh at present.
GST is still being debated between the Centre and the states. If implemented, it will subsume excise duty and service tax at the Centre’s end and value-added tax at the state level, besides cesses, surcharges and local taxes. Both these tax reforms are expected to take effect from April 1 next year.
