Budget 2021: Corporate India’s wish list

The adverse economic impact of the coronavirus pandemic has been felt by everyone, be it MNCs, big domestic companies or micro, small and medium enterprises. While corporate taxpayers have a long wish list for this year’s budget, some of the key ones are: Status quo in corporate tax rates Corporate tax rates were reduced last year to make them globally competitive, the reduced rates being 15% for new manufacturing companies and 22% for others who forgo certain exemptions/deductions. Make In India: Support through encouraging consumption To promote travel and tourism in India and incentivizing companies manufacturing in India, a one-time tax deduction may be provided to the taxpayers for expenditure incurred on travel and stay in India, purchase of electronics, white goods, and vehicles, manufactured in India. Relaxation of thin capitalization rules Currently, if interest paid to a non-resident associated enterprise exceeds `10 million in a financial year, tax deduction is restricted to 30% of earnings before interest, depreciation, and taxes. While taxpayers indeed have a long wish list, it is expected that Budget 2021 will also leave no stone unturned to boost economic activity and steer the pandemic-hit economy towards higher growth path.