Budget 2008 or India budget 2008 will be announced on 29th February, 2008. The wish list prepared by various individuals from various sectors have expressed their opinion about their respective fields. However, it is likely that the center stage will be occupied by taxes.
It is being reckoned by many that India budget 2008 will be prepared in such a way so that there is;
- Improvement in tax compliance
- Enhancement in the momentum of the growth process.
- Appeals to foreign investors.
- Public friendly, also keeping in mind the interests of the poor.
Corporate and Personal income tax- wishlist:
Statistics imply that the rate of growth manifested is remarkable. It is being reckoned that the gross domestic product or GDP this year is likely to be 9%. Corporate tax rate is 33.99%. This is inclusive of the surcharge, education cess and statutory tax rate of 30%. However, the effective rate is 19% as a result of many exemptions. The corporate sector in the country wants the rate of statutory corporate tax to be 25%. In case of personal income tax, the decrease wished for is 25% from 30%.
There are possibilities that the range, which is currently prevailing may be broadened to add many other services. This could to some extent compensate for the loss, which resulted due to the phaseout of CST or central services tax. There are many irregularities, which are existing in the present services tax regime. Expectations have been kept alive that the same may be reformed.
In the manufacturing sector, the government has been urged to shed excise duty pertaining to manufactured goods to 14% from 16%. The reason for requesting this is during the first seven months of the current year (FY2007-2008), the manufacturing sector exhibited growth by 10.4%. This figure was less than what was attained during the same period a year back, when growth registered was by 11.1%. This kindled fears of a sluggish economy.
Imports have become relatively cheaper because rupee appreciated against USD. Reducing the customs rate may further prove to be a challenge for the sector. However, there are expectations that a rationalization in the structure of duty may be brought about provided customs duty levied on finished goods is less than that of the raw materials.
Changes in other sectors are also expected to be brought about. Be it the tourism industry, power sector, health care, agricultural sector, budget 2008 is expected to have alterations pertaining to majority of the spheres of the economy.
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