Budget is not focused on Aam Adami- CA Sudhir Halakhandi
CA Nikita Jain – Now the Budget for the year 2009 has been presented and we have with us the Tax expert and eminent tax columnist and writer CA Sudhir Halakhandi Once again to give his reactions on the Budget with respected to taxation proposals. So Sudhir sir, what is your first reaction?
CA Sudhir Halakhandi- The majority of taxpayers are from the middle class and the expectation from this Budget were very high and in my opinion this class which is in majority in the tax payers community has got nothing. They expected increase in taxable Limit, investment limit, housing interest deduction and revival of standard deduction and they lost on every front.
CA Nikita Jain- Sir, but there is an increase in the Taxable Limit.
CA Sudhir Halakhandi- Very Marginal and see for the ordinary taxpayer the relief is Rs.1030 per Month which comes to Rs.85.00 per Month and for senior citizen it is Rs.1545.00 for a year. See the relief in tax liability for higher class where income is more than Rs.10 Lakhs due to removal of surcharge. For income of Rs.12 Lakhs the relief is Rs.28000.00 and for Rs.15 Lakhs the relief is around Rs.37000.00. On the income of Rs. 30 Lakhs the relief is Rs. 84000.00. This is disparity which is the main feature of this budget.
CA Nikita Jain- But sir, the tax is coming from the higher class hence there is a logic to give them more relief.
CA Sudhir Halakhandi- Yes they should be given the relief but if FM wants to satisfy every class then he should have reduced the surcharge from 10% to 5% and from the balance he should give some relief to the persons whose income is less than Rs.10 Lakhs.
CA Nikita Jain – And what is the silver line of the Budget? It is abolishing the FBT?
CA Sudhir Halakhandi- Yes you can say that abolishing the FBT is the good correction made by the FM because it is the most unreasonable, illogical tax and further it is a procedural hurdle and since it’s inception the corporate sector was demanding it’s withdrawal. See once I predicted that first change of Finance Minister will take the toll of this tax because the predecessor of FM has made it prestige issue. It is a good correction.
CA Nikita Jain- It is good relief for corporate sector?
CA Sudhir Halakhandi- Yes good relief but at the same time MAT has been increased from 10% to 15% hence from the second hand the FM has taken back the same but any way good bye to FBT is a great relief to all concerned.
CA Nikita Jain – Sir, the Limit of wealth has been increased from Rs. 15 Lakhs to Rs. 30 Lakhs!!
CA Sudhir Halakhandi- Yes, it is long overdue since the limit of Rs.15 Lakhs was set in 1992 so there was a demand for increase but in my opinion wealth tax should be scrapped since now it is giving procedural problems to the tax payers and further the collection is not very significant.
CA Nikita Jain- What about service tax on legal sector?
CA Sudhir Halakhandi- It is a very very tough initiation and see it is beginning for the law makers to touch legal sector on service tax front and though the impact is very little but the reaction from this sector will be very important for the FM to bring the legal sector under the net of service tax . In my opinion on this factor the coming days will be very tough for the FM because the reaction from the legal sector will be very crucial.
CA Nikita Jain – Besides taxation sector how do you rate this Budget.
CA Sudhir Halakhandi- See I am from taxation sector so my focus is only on Income tax and service Tax but first time I listen and read some other parts of the Budget speech also and though I am not in a position to rate these things other than taxation but in my opinion talk of setting up a committee for relief to farmers with respect to loans other than banking loan, lot of investment in infrastructure sector and subsidy on educational loan are some of the good things which shows that FM is listening and also focused to the real needs of India.
CA Nikita Jain- What about size of the Budget? The FM was very enthusiastic by crossing the 10 Lakhs Crore limit.
CA Sudhir Halakhandi- The total Budget expenditure is 10, 28,032.00 Crore which was very enthusiastically narrated by the FM. It is very big amount but on the other hand see the interest burden which is a grey area of Indian economy and require attention.
CA Nikita Jain- FM has again reiterated his intention for Goods and service tax on 1st. April 2010. What are your reactions?
CA Sudhir Halakhandi- Still I have doubt about the date but here the announcement is very honest about the format of the GST and FM has categorically said that it will be a “Dual GST” but in my opinion there should a “National GST” and the law makers should try for it.
CA Nikita Jain – So how do you rate this Budget on taxation front?
CA Sudhir Halakhandi- In my opinion it is average Budget but straight forward budget from a seasoned and serious politician. See the Budget speech – No gimmicks, No Poetry, No new illogical experiments, a very straight forward approach. The limitations of the FM were very clear and he does not show any intention to hide them. The overall approach was good but since expectations were very high so FM should have tried for some balancing act. It is not a very popular budget.
CA Nikita Jain- OK Sudhir Sir, Thanks for sharing so much with us and the members of CAclubindia.
CA Sudhir Halakhandi- Thanks Nikita and My good wishes to all the fellow members of the CAclubindia.