CA G Karthikeyan, President of The Start up Academy, shares his opinion on the 2024-25 Budget, highlighting its focus on inclusive growth and tax reforms benefiting various sectors and taxpayers.
Coimbatore: CA G Karthikeyan, President of The Start up Academy, has termed the 2024-25 Budget as a progressive and growth-oriented exercise with a strong focus on taxation. In his analysis, Karthikeyan emphasized the budget's attention to vital sectors such as agriculture, MSMEs, startups, rural economy, infrastructure, and green energy, indicating a commitment to inclusive growth.
Karthikeyan highlighted several tax-related measures that would benefit corporate taxpayers. These include the rationalization of TDS, decriminalization of delays in TDS payments, and adjustment of TCS against TDS payable. He also praised the significant relief provided in terms of reopening tax returns, with new limitations on time and threshold limits for decisions.
"Any assessment hereinafter can be reopened beyond three years from the end of the assessment year only if the escaped income is Rs 50 lakhs or more, up to a maximum period of five years from the end of the assessment year. This is a welcome move," Karthikeyan stated.
The chartered accountant noted that while reducing the long-term capital gains tax rate from 20% to 12.5% appears favorable, it is offset by the abolition of cost indexation. He pointed out that international safe harbor rules would minimize litigation for taxpayers and boost confidence among foreign investors.
Karthikeyan particularly appreciated the abolition of the angel tax, stating that it would "go a long way in removing fear and inhibitions from the startup ecosystem." He also mentioned the benefits for salaried employees under the new tax regime, who stand to save Rs 17,500 annually. The increase in standard deduction and family pension is expected to benefit an estimated 4 crore salaried taxpayers and pensioners annually.
"This will also serve to increase disposable income in the hands of the taxpayers and pave the way for an increase in aggregate demand eventually," Karthikeyan explained.
However, he cautioned that the taxability of share buybacks in the hands of recipients might impact the stock market. Despite this concern, Karthikeyan concluded that overall, this is a good budget that "sets the trajectory to realize the dream of Viksit Bharat."
Karthikeyan highlighted several tax-related measures that would benefit corporate taxpayers. These include the rationalization of TDS, decriminalization of delays in TDS payments, and adjustment of TCS against TDS payable. He also praised the significant relief provided in terms of reopening tax returns, with new limitations on time and threshold limits for decisions.
"Any assessment hereinafter can be reopened beyond three years from the end of the assessment year only if the escaped income is Rs 50 lakhs or more, up to a maximum period of five years from the end of the assessment year. This is a welcome move," Karthikeyan stated.
The chartered accountant noted that while reducing the long-term capital gains tax rate from 20% to 12.5% appears favorable, it is offset by the abolition of cost indexation. He pointed out that international safe harbor rules would minimize litigation for taxpayers and boost confidence among foreign investors.
Karthikeyan particularly appreciated the abolition of the angel tax, stating that it would "go a long way in removing fear and inhibitions from the startup ecosystem." He also mentioned the benefits for salaried employees under the new tax regime, who stand to save Rs 17,500 annually. The increase in standard deduction and family pension is expected to benefit an estimated 4 crore salaried taxpayers and pensioners annually.
"This will also serve to increase disposable income in the hands of the taxpayers and pave the way for an increase in aggregate demand eventually," Karthikeyan explained.
However, he cautioned that the taxability of share buybacks in the hands of recipients might impact the stock market. Despite this concern, Karthikeyan concluded that overall, this is a good budget that "sets the trajectory to realize the dream of Viksit Bharat."