The Union Budget for 2023-24 is being proposed at a critical moment marked by geopolitical uncertainty, rising inflation, and plummeting global economic development. At this point, targeted actions to boost domestic sources of growth are critical to maintaining the stable economic growth track.
In a continuous pursuit of widening the tax base, the government has introduced a wide gamut of withholding tax provisions over the years, with varied rates and thresholds and overlaps in scope. Thus, there is an urgent need to simplify the withholding tax structure. Further simplification, rationalisation, ease of paying taxes, and reducing tax litigation should be key priorities.
Currently, people across industries are working from home. Employees are likely to incur additional “work from home”-related expenses, such as internet charges, rent, power, furniture, and so on, and companies will need to give allowances to cover these costs. Employees who work from home should be granted exemptions under “work from home” allowance.
Given that the Indian economy has begun to recover from the fiscal consequences of the COVID-19 pandemic crisis, the present administration is expected to focus on measures to accelerate job creation and broaden the tax base by rationalising GST and personal income tax slabs to boost consumption.
The external environment is expected to remain unfavourable for some time. As a result, we must broaden our home economy by developing new growth sectors and pushing job creation in order to enhance domestic demand, inclusion, and growth.