The Finance Ministry started preparing for the next budget and sought their suggestions from industry and trade associations about changes in direct and indirect taxes. This is probably the first time the Finance Ministry has sought such suggestions. Finance Minister Nirmala Sitharaman will present the budget for the Financial year 2020-21 on February 1, 2020.
Sitharaman announced additional measures to speed up the sluggish economy within a month of Parliament's approval of its first budget. Ministry where pre-budget consultations are held with representatives and stakeholders from various fields. This is probably the first time that the revenue department of the finance ministry has issued a circular asking for suggestions for changes in income tax rates for individual people and companies as well as indirect taxes like excise and customs duties.
In this circular issued on November 11, industry and trade unions have invited suggestions about the fee structure, changes in rates and increasing the tax scope for direct and indirect taxes. The Finance Ministry has said that whatever suggestions are made, they should be financially appropriate. The circular states, "along with the suggestions and ideas given by you, statistics figures about production, price, revenue impact of changes should also be given."
Sitharaman announced to reduce the corporate tax rate for domestic companies from 30 per cent to 22 per cent on 20 September after his first budget on 5 July. This brings the effective corporate tax rate to 25.2 percent after incorporating all kinds of additional charges. With this, the tax rate has been kept at 15 percent for all manufacturing companies set up after October 1. The rate goes up to 17 percent, including additional taxes and surcharges. Along with this, a demand was also raised to reduce the rate of personal income tax, so that more money is left in the hands of the common man and the economy of the country can be increased further by increasing consumption.
