The government has attempted to have a balance between populism and pragmatism in this budget, and, as expected, has come up with some ups and downs. Some of the ups being reduction in corporate tax rates, standard deduction for salaried taxpayers and additional exemption and deductions for senior citizens. It is also worth noting that there is no introduction of Estate Duty (inheritance tax), which was rumoured to be re-introduced. From an international investors perspective, while on one hand they have sweetened the deal by providing tax reliefs for investment in International Financial Service Centre (IFSC), but on the other hand, the levy of long term capital gains tax, may not go down well especially with institutional players. Also, the income-tax provisions are sought to be updated and aligned with the taxing principles provided in Multi-lateral Instrument (which seeks to amend the network of bilateral tax treaties entered between various countries, including India).
From a deal-maker’s perspective, while there were no announcements of tax relief in respect of IBC cases, the fine print does indicate some much-needed additional relief for distressed companies.