Traders who are facing hardship because of the recent lockdown are now expecting few of measures from the policy makers in the forthcoming Union Budget. The Nag Vidarbha Chamber of Commerce (NVCC), representing more than 13 lakh traders of the region, urged Union Finance Minister Nirmala Sitharaman to revise Personal Income Tax slab and take other measures that could give them a helping hand in the current phase. In a letter sent of Union Minister, NVCC highlighted that the Government has amended the tax rates whereby small companies are being taxed at 25 per cent whereas entities that are working as partnership firms are still paying taxes at 30 per cent.

 

“It is suggested that these partnership firms are at par with small companies and thus the Government should reduce the maximum rate of tax to 25 per cent. Further, the remuneration paid to partners and interest paid to partners should be allowed as deduction while applying the deeming provisions under section 44AD of the Income Tax,” NVCC President Ashwin Mehadia said. Under the Revision in Personal Income Tax Slab, the NVCC said that there is a strong need to raise the exemption slab of Personal Income Tax which has not been done since long. Basic exemption limit should be raised to Rs 5 lakh and income above that till Rs 10 lakh should be taxed at 10 per cent. This will be highly beneficial to small and medium businessmen along with majority of salaried people, NVCC observed. Minimum Alternate Tax as well as Alternate Minimum Tax which is at present taxed at 18.5 per cent is considered to be very high.

 

It is suggested to bring down the same to 10 per cent. NVCC also suggested to bring down the rate of MAT as well as AMT and suitable amendments to be done so that the needy companies can get the maximum advantage. The traders body further urged the Union Finance Minister to raise deduction limit under section 80C and reconsider Section 50C, 43CA and 56(2) of Income Tax Act, 1961. “An assessee is required to pay interest under various sections of Income Tax. There have been drastic fall in the interest rates across the country.

 

Due to ongoing pandemic situation many people have been facing the issue of liquidity making them difficult to pay the advance taxes resulting in bulky payments of interest due to delay. It is suggested to revise these interest rates looking to the prevailing market conditions,” NVCC highlighted in the letter. “Please take the aforesaid measures into consideration in the interest of small and medium businessmen who have been a strong pillar in the development of economy and of the country,” Secretary of NVCC Ramawtar Totla, CA and Convener of Direct Tax Committee of the body -Sandeep Jotwani said.