New Delhi: The new government should accord priority to raising income tax slab, implementing Direct Taxes Code (DTC) and Goods and Services Tax (GST) with a view to give relief to common man as well as the industry, tax experts have suggested.
"The key expectation that a common man has from the new government is widening of tax slabs," said Divya Baweja, Partner, Deloitte Haskins & Sells.
Baweja also pitched for raising the limit of deduction on home loans interest in case of self-occupied house property, from Rs 1.5 lakh per annum currently.
Another tax consultancy firm PwC has suggested government should make visible changes in governance and administration to restore confidence on business in the government.
"The budget announcements may include clear road map to deal with tax policy including GST, and key administrative reforms," said Rahul Garg, Leader Direct Tax, PwC India.
The Budget for 2014-15 is likely to be presented in Parliament sometime in July.
As per the current structure, there is no tax on income of up to Rs 2 lakh per annum, 10 per cent on Rs 2-5 lakh, 20 per cent on Rs 5-10 lakh and 30 per cent on income beyond Rs 10 lakh.
The Parliamentary Standing Committee on Finance headed by senior BJP leader Yashwant Sinha had proposed to raise the income tax exemption limit to up to Rs 3 lakh per annum, and thereafter tax at the rate of 10 per cent for Rs 3-10 lakh, 20 per cent for Rs 10-20 lakh and 30 per cent on annual income beyond Rs 20 lakh.
PwC India joint tax leader Ketan Dalal said the BJP manifesto makes reference to the need to deal with "tax terrorism" and a "tax policy roadmap", and there is also a reference to bringing on board all state governments in adopting GST.
"One does expect some quick steps to address concerns on this front, particularly for international investors, who have been badly impacted by a very aggressive approach, and equally aggressive interpretations," Dalal said.
The GST, which proposes to subsume all indirect taxes like excise and service tax, has been opposed by several states including BJP ruled Gujarat and Madhya Pradesh. A constitutional amendment bill to introduce GST in the country is pending in Parliament since 2010.
Referring to the concerns of foreign investors, Deloitte managing Partner M Lakshminarayanan said: "Transfer pricing has been a major area of concern for a large number of MNCs operating in India. The new government should issue guidelines on all the contentious issues so as to clarify how these items will be dealt with in the future".
The issue of transfer pricing- transaction prices between separate entities of large firms- has generated much heat in India involving MNCs operating here such as Vodafone, Shell and Nokia.