Over half of the professionals surveyed expect a 500 basis point decrease in corporate tax to 25% from the current 30% in the upcoming union budget.
In a survey conducted by Deloitte with 120 professionals across various sectors, almost 50% said that tax reforms were most critical for the government right now. They felt that tax litigation followed by reforms in real estate sector should be prioritized.
"Given the strict measures taken by government around curbing black money, it may be the appropriate time to reduce the tax rate," the survey said.
The respondents also felt that there was a need to reduce tax outgo at a personal level given the rise in cost of living and inflation.
The favoured responses in percentages were:
- 54%: tax rate reduction by at least 5% across all categories
- 33%: raising the exemption limit by at least Rs 250,000
- 10%: bringing back the standard deduction
The survey revealed that reduction in personal taxes will increase funds available with the individual, in turn increasing domestic demand, savings, and investments.
More than 50% also said that they expect the growth to be above 7%.
"While note-ban and GST led to some market disruptions and subdued sentiment, the economy has of late been showing signs of recovery," the survey said.
"Some of the indicators show a healthy growth including high liquidity, healthy capital inflows, and improving forex reserves. There are strong reasons to believe that consumer sentiment and investment demand might see a turnaround over the next year," it added.
Inputs from PTI