Budget season wish lists

It is that time of the year. Weeks ahead of the budget presented by the finance minister, everyone gets into action mode to run the spell checks, first in auto mode and then a final read before emailing their wish lists of what is to be done or undone in the budget. The industry associations, of course, have big events to present the memorandum to the FM. However, others, not so fortunate, have to send this through emails and letters. One does not know for certain whether the designated undersecretary or even his team would be able to go through all the wishes of the bravehearts who have ventured to make suggestions to the finance minister. Nevertheless, mails keep pouring in, some even arriving after the budget is presented!

Given the robust collection of income tax and corporate tax for FY24, it is not surpris-ing that many have pleaded with the honour-able finance minister to raise the exemption limit. The rationale is that the collection of entry-level taxpayers at 5 per cent can be done away with without much of a loss to the exchequer. This would enable people to have more disposable income, which can boost consumption.

With the smart usage of technology, the administrative costs of collection have come down significantly, but the time taken for inspection could be better spent looking at the returns of other taxpayers.

Other suggestions being floated include bringing uniformity in capital gains across different classes. Capital gains tax on long-term shares held for one year or more is 10 per cent, while short-term is 15 per cent. Long-term gains on property are around 30 per cent, with the tenure for long-term property gains set at three years.

Long-term capital gains on the receipt side are not disclosed separately in the budget doc-uments, while short-term tax is added to the income. Hence, it is not possible to know the share of capital gains in the overall scheme of things. Pleading for rationalisation is fraught with risks.

It could mean increasing the tax on securities gains slightly and reducing the tax on property gains slightly to arrive at a mean