A survey of chief executive officers, chief financial officers and other top officials of 300 companies by consulting firm Grant Thornton shows that the corporate are expecting that the Finance Minister P Chidambaram will tax the super-rich, introduce goods and service tax and raise tax rebates on home loans in the coming Budget. A majority do not expect any towards inheritance tax. About, 70 per cent of respondents feel that finance minister will introduce measures to widen personal income tax deductions, especially in home loans under section 80C of the Income Tax Act.
62% of the respondents expect the super-rich tax in the Budget. Almost 48% of the respondents said the Budget will be investor-friendly, while another 40% it to be revenue-friendly. (CEOs’ Budget wishlist). Nearly 83% of respondents do not expect major changes in the corporate tax rates while they expect increase on the limits of tax savings investments especially linked to housing loan and principal repayments.
In case of existing anomalies, corporate India expects the government to bring in clarification on the stand on “indirect transfers” like the Vodafone case and clarity on domestic transfer pricing regulations.
In recent years, there have been cases where top Indian and multinationals have received tax demands on transfer pricing. Shell has received a tax notice for notional gains while investing in its 100% subsidiary in India, many Indian companies have received notices for earning a notional guarantee fee while giving guarantees to the special purpose vehicles set up for acquisitions abroad. These are expected to be resolved in the coming budget corporate India expect.