Union Budget 2020: We see this year's Union Budget as a firm step towards India's aim of becoming a $5-trillion economy. As a technology player embedded in India's technology ecosystem, we welcome the government's proposal to build Data Centre Parks across the country.
The Union Budget's focus on enhanced digital connectivity and on emerging technologies such as machine learning and artificial intelligence, along with the allocation towards quantum computing, are sure to provide a fillip to the economy.
The government has shown good intent in its move to settle tax disputes amicably and make income-tax appeals faceless. It will definitely result in better compliance and more tax collection in the government's kitty, going forward. Further, the abolishment of the dividend distribution tax (DDT) will encourage more people to invest in companies, and stay invested for the long term.
The Union Budget also addresses a long-pending demand of the start-up community on the taxation of ESOPs (employee stock ownership plans). It will help both new-age companies as well as their employees to efficiently use this tool of employee compensation and retention.
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In addition, the Union Budget clearly shows the government's willingness to shift towards a better tax framework.
The introduction of new tax slabs (with a condition to not availing certain deductions/ exemptions) is a good start in that direction. In my opinion, this new framework, coupled with the GST implementation, will result in both better tax compliance and reduced litigation.
The proposal to reduce corporate tax and the inclusion of more industries in the scheme is a very positive move for businesses. Further, setting up a dedicated investment cell for single-window clearance will also encourage more foreign direct investment.
Similarly, the move to increase the insurance cover on bank deposits from Rs 1 lakh to Rs 5 lakh is a welcome step from the customers' point of view. Furthermore, the intention of decriminalisation of violation under the Companies Act is a move in the right direction.
The author is Deputy chief financial officer, Paytm