KPMG in India’s Pre-Budget survey 2019-20 · 2020-07-28 · KPMG in India’s pre-budget survey...

1KPMG in India’s Pre-budget survey 2019© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG

network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG in India’sPre-Budget survey 2019-20

home.kpmg/in

July 2019



KPMG in India’s pre-budget survey 2019-20 findings

The taxpayers in India have many expectations from the Union Budget 2019-20 which is the second term full-fledged budget of the NDA government and presented by India’s first full-time woman Finance Minister.

KPMG in India had conducted a pre-budget survey and are pleased to present the survey results of what the country expects the budget to deliver. We are also happy to state that a majority of respondents believe that the overall tax environment in India has improved as compared to the past.

Direct tax

• The new and simplified Direct Tax Code (DTC) being on the anvil, majority of the respondents expect that the Union Budget 2019-20 is unlikely to announce any major direct tax policy amendments. The levies like Minimum Alternate Tax, Dividend Distribution Tax, Surcharge and Cess are also unlikely to change significantly

• Majority of the respondents expect that the corporate tax rate is unlikely to be reduced to 25 per cent as applicable to small companies. The respondents expect that the tax rate for LLPs will be aligned with the tax rate applicable to companies

• Majority of the respondents expect that for individuals there will be an increase in the basic tax exemption limit of INR2.5 lakh

• Majority of the respondents expect the tax rate on long term capital gains arising on unlisted equity shares be harmonised at 10 per cent for Resident and Non-Resident taxpayers

Indirect tax

• The responses received indicate that a large section of the respondents are equally divided on the possibility of GST rate reduction in the upcoming Budget

• Majority of the respondents expected extension of the tenure of the National Anti-Profiteering Authority. This came true with a two year extension of the authority announced by the GST Council recently



Extending tax incentives/holidays

• Majority of the respondents expect that the weighted deduction for scientific research expenditure incurred in the recognised in-house R&D facility to be extended beyond 31 March 2020

• As an impetus to the ‘Make in India’ initiative, majority of the respondents expect the tax holiday for exports available to SEZ units be extended beyond 31 March 2020

• To boost the real estate sector, majority of the respondents expect a raise in the deduction limit of INR2 lakh for housing loan interest on self-occupied properties

• Towards a competitive edge for IFSCs, the respondents expect an extension of tax holiday available to IFSCs to a much longer period than 10 years and also a 100 per cent holiday throughout the holiday period in line with international benchmarks

Reduction of tax litigation and rationalization

• The respondents expect that the APA renewal process will be made less onerous and less time consuming especially where there is no change in the facts of the applicant’s case

• In line with the increase in monetary limits for filing of appeals by the tax department, the respondents expect further measures to be introduced to reduce tax litigations including a new scheme for dispute settlement

• The respondents feel that the ‘secondary adjustment’ transfer pricing provisions are creating several practical difficulties in implementation and need to be relaxed suitably

• The respondents expect that the thin capitalisation transfer pricing provisions for NBFCs and banks will be made on par and NBFCs to be exempted from their ambit

• The respondents expect the relaxation of deemed income provision applicable to buyers who purchase listed shares under insolvency regulations and this is likely to boost the resolution of stressed assets under the IBC regime

The inf ormation contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeav or to provide accurate and timely information, there can be no guarantee that such information is accurate as of thedate it is received or

that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG name and logo are registered trademarks or trademarks of KPMG International.

This document is for ecommunications only



Industry

TechnologyBuilding and

Construction

Consumer

MarketsEducation

Defense and

Aerospace

Financial

ServicesTelecommunications Healthcare

Life Sciences |

Pharmaceutical

Energy and

Natural resources

Media and

entertainmentPrivate equity

LAB

15% 7% 5% 2%

1% 11% 2% 4%

3% 3% 2% 2%

Transport, leisure

and sports

Public sector

enterprise

2% 1%

Others

40%

Responses226



Do you expect the Honourable Finance Minister not to

make any major direct tax amendments in the upcoming

budget and wait for the report of the new DTC committee?

0 1

5 3 %Yes

2 0 %Maybe

2 7 %No



Do you expect the corporate tax rate to be reduced to 25

per cent for all companies and LLPs?

0 2

Companies with a turnover exceeding

INR250 croreLLPs

Yes

Maybe

No Yes

Maybe

No

3 9 % 4 6 %

1 5 %

4 4 % 3 4 %

2 2 %



Do you expect reduction/abolition of the following:

0 3

Minimum AlternativeTax Rate

Dividend Distribution Tax

Surcharge

Cess

Long-term capital gains tax on listed securities

Reduction Abolition No change

2 6 % 1 9 % 5 5 %

3 3 % 1 4 % 5 3 %

2 2 % 2 2 % 5 6 %

1 4 % 2 8 % 5 8 %

2 5 % 2 2 % 5 3 %



Do you expect harmonisation of capital gains tax rates

between domestic and foreign sellers?

0 4

3 9 %Yes

3 0 %No

3 1 %Maybe



Do you expect the new Finance Minister to increase the

maximum threshold of non-taxable limit of income

(INR2.5 lakh currently) for individuals?

0 5

Maybe

No

5 %2 1 %

Yes

7 4 %



According to you, will the Government consider any

form of additional taxation for “super rich” taxpayers

(say above INR10 crore of income or above INR100 crore

of assets).

0 6A

2 2 %

2 6 %

Yes

No

Maybe 2 2 %

2 6 %

5 2 %



what is most likely that the Government could consider?

0 6B

Re-introduction of

wealth tax/estate

duty

Introduction of

inheritance tax

Higher tax rate of

40 per cent for

income above

INR10 crore?

Do not expect any

additional tax on

super rich

1 0 % 1 3 %

5 8 % 1 9 %



In your view, what all incentives should the Government

consider for the housing sector? (select all applicable)

0 7

Increase the limit for interest of housing

loan for self-occupied properties

from INR2 lakh.

Remove the limit of INR2 lakh for set off of house property loss with other income of

the same year

Carve out deduction for repayment of

housing loan principal from existing overall

limit of deduction under Section 80C of

INR1.5 lakh

6 5 % 5 1 % 3 4 %



Weighted deduction for expenditure incurred on in-

house R&D facility is expiring on 31 March, 2020. Do you

expect that this weighted deduction will be extended in

order to support the ‘Make in India’ initiative?

0 8

6 6 %Yes

1 0 %No

2 4 %Maybe



Do you expect extension in the sunset date of tax

holiday for SEZ unit beyond 31st March, 2020?

0 9

No

Yes

May be

5 2 %

2 8 %

2 0 %



Do you expect an extension in tax holiday for IFSC units

from 10 years to 15 years?

1 0

3 5 % 3 5 %3 0 %

Yes NoMay be



Do you expect NBFCs to be exempted from applicability

of thin cap rules?

1 1

2 3 %

4 3 %

Yes No

May be

3 4 %



Do you expect extension of thin cap norms to domestic

financing structures?

1 2

3 2 %

Yes

3 0 %

No

3 8 %May be



Do you expect rationalisation of ’avoidance’ norms

attributing deemed income for buyers at the time of

purchase of shares of listed companies/companies

under Insolvency and Bankruptcy Code?

1 3

Yes

Maybe

No

3 6 %

4 0 %

2 4 %



May be

1 8 %

1 5 %

No

6 7 %

Yes

1 4Do you expect the procedure for ’renewal’ of Advance

Pricing Agreements (APAs) to be simplified?



Do you expect the onerous requirements of ’Secondary

Adjustment’ to be eased given the practical difficulties

faced during implementation by most taxpayers?

1 5

5 1 %Yes

2 1 %No

2 8 %May be



Do you think a settlement mechanism to close long

pending issues in litigation will be introduced?

1 6

6 7 %Yes

1 8 %May be

1 5 %No



Do you expect GST rate reduction in the coming

budget?

1 7

4 1 %Yes

1 5 %May be

4 4 %No



Do you think the term of National Anti-profiteering

authority will be extended?

1 8

5 9 %Yes

2 3 %May be

1 8 %No



home.kpmg/in/socialmedia

The information contained herein is of a general nature and is not intended to address the circumstances of any particular

individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such

information is accurate as of the date it is received or that it wil l continue to be accurate in the future. No one should act on such

information without appropriate professional advice after a thorough examination of the particular situation.

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affi liated

with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The KPMG name and logo are registered trademarks or trademarks of KPMG International.

This document is for e-communications only.

https://in.linkedin.com/company/kpmg-india

https://in.linkedin.com/company/kpmg-india

https://www.facebook.com/KPMGIndia/

https://www.facebook.com/KPMGIndia/

https://www.instagram.com/explore/locations/602997494/

https://www.instagram.com/explore/locations/602997494/

https://www.youtube.com/channel/UC40V577Ls_EH719sA0cEI4A

https://www.youtube.com/channel/UC40V577Ls_EH719sA0cEI4A

https://twitter.com/kpmgindia

https://twitter.com/kpmgindia

KPMG in India’s Pre-Budget survey 2019-20 · 2020-07-28 · KPMG in India’s pre-budget survey...

Documents

Transcript of KPMG in India’s Pre-Budget survey 2019-20 · 2020-07-28 · KPMG in India’s pre-budget survey...