India to Announce Interim Budget on February 16th
Feb. 6 – The present Indian government which will deliver an interim budget on the 16th of February is expected to announce tax sops to aid the staggering economy. While tax benefits will not be announced across the board, experts expect sops to be given to selected industries that have been severely affected.
"They might keep the options open for some fiscal support — more expenditure and tax exemptions for textiles, exports and for small and medium sized firms," N.R. Bhanumurthy, a senior economist at the Institute of Economic Growth told Reuters.
Although it is not established political practice to announce tax cuts in an interim budget, the economic slowdown calls for effective and innovative policy changes.
“Keeping in view the pressures on the Indian industry, lowering of tax rates for companies and individuals may be considered as part of overall economic relief package. As an immediate relief, the removal of surcharge may be considered at this stage,” KPMG executive director Vikas Vasal told the Economic Times. According to current tax laws, individuals with an income above Rs one million (US$20,550) or companies with an income of more than RS 10 million (US$205,507) have to pay a 10 percent tax surcharge.
India’s congress party which holds a majority share in the present coalition government will announce an interim budget for the year 2009-10. India’s fiscal year runs from April to March and elections for a new government are due before May this year. The newly elected government once sworn in will announce the union budget for the following fiscal year 2009-10.