Budget Reaction from Aseem Chawla, Partner Amarchand & Mangaldas & Suresh A. Shroff & Co.
While the full text of Finance Bill, 2010 is eagerly being awaited, it is felt that the UPA Government while presenting the tax proposals in the Budget 2010-11 has made a collective conscious effort albeit half-hearted to take care the needs of small tax payers in the wake of double digit inflation.
The basic exemption limit for individual taxpayer has been marginally augmented. The same is coupled with some levels of rationalization to tax payers forming part of the large base of small and medium sized enterprises in the form of simplification of filing tax returns and enhancement in the limit for compulsory audit.
By initiating such reformative measures at the behest of the small tax payers, the Finance Minister has ensured presentation of an enabling budget. The said proposals may yield higher levels of voluntary compliance and prevention of fiscal evasion as suggested in the budget speech made by the Finance Minister. However, it is difficult to suggest that the same may lead to an increase of widening of tax base which has been a long-standing unresolved challenge with the policymakers.
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