NEW DELHI: The Union finance ministry, which has started work on Budget 2022-23 and is reviewing both personal and corporate tax exemptions, has hinted that it might roll back some concessions for industry. The ministry is currently assessing both the economic costs and benefits of schemes before taking a call on what to keep and what to nix, sources said.
A senior official told this paper that this is in line with the government’s policy to broaden the tax base by reducing rates and letting go of exemptions. “Some exemptions were withdrawn in the last Budget and the review process is on for the rest. A few tax breaks that will expire soon won’t be renewed,” the official added.
While he declined to name any scheme, it is learnt that the capital gains tax exemption for investing in startups, which expires in March 2022, may not be renewed. Ditto with the basic customs duty and IGST exemptions for export-oriented units.
In its letter seeking suggestions for the upcoming Budget, the ministry urged industrialists to back their recommendations with economic justification. “It would not be feasible to examine suggestions that are either not clearly explained or supported by justification...” the letter read.