00:00Budget 2025 is one of the most important events of the year.
00:10On Feb 1, Finance Minister Nirvana Sitharaman will present the budget in the Parliament.
00:16From CAPEX to the education sector, investors are waiting for some kind of good news.
00:23Income tax remains a key subject.
00:26Hello and welcome, my name is Shruti Sarkar and you are watching GoodReturns and Future
00:30Focus Budget 2025.
00:32In this episode, we are going to talk to Kritashna More, Head of Tax Vedanta Aluminium.
00:40Welcome Kritashna.
00:41Thank you so much Shruti for having me on the show, it's a pleasure.
00:46Same here.
00:47So my first question to you is, what are the focus areas which can deliver tax relief to
00:53the common man in the budget?
00:56Shruti, if we are talking about a common man here, the major expectations that a common
01:03man always has from a budget is, you know, greater financial relief, lesser compliances
01:11burden, easier and simplified tax regime and certainty and faster resolutions from the
01:18tax authorities.
01:20The most plausible way to achieve this objective from the finance minister would be to, I would
01:27say really rationalizing and simplifying the new tax regime.
01:31If you see currently under the new tax regime, the tax rate varies from 5% to 30%, right?
01:39So this year in the budget 2025, the industry is expecting that the finance minister is
01:44going to consolidate these tax rates into broader categories.
01:50Having said that, another big relief that a common man expects to increase their disposable
01:56income to meet the daily expenses is, you know, tax rate cuts, higher deductions, higher
02:04income tax exemptions.
02:06If you see under the old tax regime, you know, still the government offers a lot of deductions
02:13for investments into, you know, various insurance schemes, various mutual funds under Section
02:1980C, which is currently not available under the new tax regime.
02:23It allows deductions for health insurance premium.
02:27So in this budget, to make the new tax regime more attractive, we are expecting that the
02:33government will, as it has been doing in the past, bring these new deductions in the newer
02:40tax regime also.
02:42This will, you know, go a long way to enhance demand and supply in the economy, which will
02:49in turn have a multiplier effect, ensuring higher growth, more employment opportunities
02:54for the youth.
02:55Right.
02:56Right.
02:57Income tax, you know, let's address the elephant in the room.
03:02So this is hugely talked about.
03:04And some of our sources have said that, you know, people with annual income of less than
03:0915 lakhs may get more income tax relief in the upcoming budget.
03:14What is your view on that?
03:17You know, there have been, you know, loud whispers in the corridors around this initiative
03:23from the government.
03:25If I talk about the current scenario, under the new tax regime, people falling within
03:32the income bracket of 7.5 lakhs do not effectively pay any taxes because of lower income tax
03:39rates and, you know, the simpler processes.
03:42However, people who fall within the income bracket of above 15 lakhs, high debt worth
03:48individuals, they end up paying at least 33% in direct taxes.
03:53And in addition to that, around 20% in indirect taxes, which is significantly high.
03:59If we talk from the global scenario, India is amongst the highest taxed countries in
04:05the world.
04:06Many other countries like Singapore, USA, Canada, Dubai, they have a lot of flexibility
04:13in the tax regimes in terms of determining the tax liability on the basis of number of
04:18earning members in the family, number of dependents, etc.
04:22While in India, the tax rate largely remains the same.
04:27And the highest contributor to the government exchequer are people who are falling within
04:33the income bracket of above 15 lakh rupees.
04:37Therefore, like I said earlier, and we have also seen a trend of high net worth tax individual
04:44moving to more favoured tax nations like Singapore and Dubai.
04:49So the government has understood this trend.
04:52And in this budget, we are expecting the finance minister to introduce a tax rate cut for high
05:01net worth tax individuals or to say for people falling in the income bracket above 15 lakh
05:07rupees.
05:08That's going to be the headline of the show.
05:11I think that we are expecting some kind of relief, some kind of cut, tax rate cut.
05:17Moving forward, this old tax regime, new tax regime, do you think that the old tax regime
05:23will be changed, abolished in the upcoming budget?
05:28What are your views?
05:30See, the way the recommendations have moved to the finance ministry during the pre-budget
05:36consultations, it seems like for this year, at least the government will continue with
05:42the dual tax regime and bring more deductions within the new tax regime to make it more
05:48attractive.
05:49But the old tax regime for now is not phasing out, at least for this year.
05:54Right, right.
05:55Okay.
05:56And before I let you go, Kritashna, one more very important question.
06:01We spoke about how common man could get a little bit more tax relief, but benefits to
06:09corporates, how do you think it will trigger down to common man in the upcoming budget
06:15if some reliefs are given, some benefits are given to the corporates?
06:19Right.
06:21You know, the cost of goods and services in the economy has a direct impact on a common
06:29man's pocket.
06:31Therefore, the need of the hour from the corporate sector has been, you know, to bring more certainty
06:38in the tax regime, to bring more clarifications in the tax provisions in the law, so that
06:45the corporate sector expects that, you know, they're not one fine day given a huge, given
06:53a tax notice with huge tax demand, because, you know, any uncertainty on the corporate
06:58sector will ultimately trickle down to the common man in terms of increase in the cost
07:04of goods and services.
07:05Therefore, the industry associations, the trade associations have, you know, vehemently
07:12requested the finance minister this time to ensure that there are no retrospective
07:17amendments made in the law, which, you know, provides uncertainty, creates uncertainties
07:23amongst the domestic players in the market and also the international investors.
07:29Secondly, what we are expecting for the corporate sector is that there are still huge litigation
07:36pendings for the pre-GST regime, though under the GST regime, the government has tried to
07:44bring out amnesty scheme.
07:46Hence, however, there is still a need for a consolidated amnesty scheme at the central
07:53level, which can help corporates to settle their pre-GST disputes, you know, because
08:02any kind of tax demand does not reflect well upon the financial statements and upon the
08:08markets.
08:09Therefore, we are expecting that the government will roll out amnesty scheme at the central
08:15level, which will be later incorporated at each state to give relief from the old tax
08:20demands.
08:21Another front is, you know, we need to make our domestic industry more competitive in
08:26the international market, especially considering the way the political situation is moving
08:32in the global economy, right?
08:34So, we are expecting that the government will increase the coverage of the production-linked
08:40incentive schemes to cover more sunrise sectors in the economy, would provide higher export
08:47benefits, etc.
08:49And these benefits ultimately will have an impact on, you know, the cost of goods and
08:55services which ultimately are consumed by the common man.
08:59Hence, you know, a lot of suggestions have been made.
09:02Let's see which all of these suggestions actually, you know, make a way to the finance bill.
09:09Kritashna, this was extremely insightful and some of your comments, I'm sure, you know,
09:13it will make it to the headlines of many stories that probably we are publishing and, you know,
09:20viewers will also understand.
09:22Thank you so much for joining us, viewers.
09:25That was Kritashna More, Head of Tax, Vedanta Aluminium.
09:29Thank you, Kritashna, for joining us.
09:32Thank you, Shruti, for having me here.
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