The Union Budget 2017 is finally out and it seems the Finance Minister (FM) and his team has tried to play it safe with some tax reliefs for both SMEs and private individuals. The FM also announced that the GST roll-out is on track and will progress as scheduled. Stating that considerable progress has been made with GST and that the implementation will bring more taxes to states and centre, the FM said that the GST council has finalised recommendations on all issues based on consensus. He also stated that not many changes were proposed to indirect taxes due to this imminent roll-out of GST.
There was some good news for start-ups as it seems the government is living up to its promise of making India a start-up friendly economy. This included a proposal to reduce tax for small companies with a turnover of less than Rs 50 crore, to 25 per cent. Also, start-ups can now avail of profit linked-deductions for 3 years in the first 7 years; this was earlier set at 3 years for the first 5 years of existence.
On the issue of removal of Minimum Alternate Tax (MAT), the FM said, “It is not practical to remove or reduce MAT at present.” However, MAT credit can now be carried forward to 15 years instead of the current 10 years.
Speaking about demonetization, the FM claimed the impact on economy was transient and the long-term benefits would include higher GDP and tax revenue. He also said that the effect of demonetization is not expected to spill over to the next year.