Union Budget 2015 came as a pleasant surprise for the business community. Loaded with several tax relief for corporate and start ups, it can well be seen as a good step towards the agenda of ease of doing business.
The budget is a representation of 2 Is, investment and infrastructure. Finance minister had bounties on offer even for the last man in the row; that would be MSMEs. The budget carries huge thrust for SMEs and MSMEs as they will be able to access funds. Let’s have a quick look at some important tax sops, granted by the FM.
It is seen as though the reduction of Corporate Tax will positively affect the corporate sector, but in reality, its effect is going to be neutral. Though, the budget speaks about reduction of rates from 30% to 25%, that too over next 4 years, all the exemptions now available to the corporate shall be done away with in a phased manner. The current effective tax rate of 21% shall move up to 25%.
Reduction of Securities Transaction Act (STT) will boost liquidity in the market as STT which is still seen as a tax over and above income tax and can be set off only against the profit from securities, any reduction in STT will help money flow improve.
Entrepreneurs and aspiring entrepreneurs can cheer up aloud as government has announced creation of MUDRA (Micro Units Development Refinance Agency) through which start ups can access funds. Besides this, Electronic Trade Receivable Discounting System will ensure a healthy working capital cycle. This will set a tone for active businesses from big and small companies. Entrepreneurs only need to come up with a sustainable business model and government will take care of them.
Together, all of this makes this the best time to launch a business. The budget certainly has a lot to offer from the ‘ease of business’ point of view. Definitely it is the right time to start business. In fact, FM himself launched the e-Biz portal which integrates 14 regulatory permissions at one go.
More about the writer:
Murali R, Vice President Delivery at MyCFO is a Cost Accountant with 20 years of experience in the corporate field associated with various industries viz., Telecom (Indus Towers), Oil & Gas (Cairn Energy), IT Software (Cognizant Technologies), Sugar (Thiru Arooran Sugars), Pharmaceutical & Engineering. His expertise includes financial planning, budgeting, accounting, costing, taxation, fund management, treasury, cost control, audit, compliance, MIS reporting, ERP management & team development. Has track record of setting up new teams and processes in synchronization with organizational goals and objectives. Proficient in both US GAAP & IAS. Analytical, problem solving and leadership qualities inherited by delivering solutions in conjunction with business requirements. Murali has good interpersonal skills allowing him to engage and get the best out of teams that he leads.