Wednesday 22 January 2020

DISCUSS THE POLICY MEASURES TAKEN BY GOVERNMENT TO PROMOTE GROWTH AND EMPLOYMENT GENERATION IN INDIAN ECONOMY?

            Measures to promote growth and employment generation: Tax policy plays an important role in promoting the growth and creation of employment. A number of measures have been taken by this Government in this direction, some of which are as under:
(i) Profit-linked deduction was introduced for start-ups.
(ii) The scope of investment-linked deduction was broadened by including certain new sectors, including infrastructure, which are critical to growth.
(iii) Investment allowance and higher additional depreciation was provided for undertakings set up in backward regions of states of Andhra Pradesh, Bihar, Telangana and West Bengal.
(iv) Incentive for employment generation was broadened and the conditions for eligibility to claim the incentive were relaxed.
 (v) Benefit was provided for computation of MAT liability and carry forward of loss for companies under Insolvency and Bankruptcy Code (IBC).
(vi) Safe Harbour provisions were further liberalised to align with industry standards.
(vii) Scope of domestic transfer pricing provisions was restricted only for transactions between enterprises having profit-linked deductions.
(vii) Pass through status was provided to Category I & II Alternative Investment Funds (AIFs).

 (viii) The time period for carry forward of MAT credit was increased from 10 to 15 years.  


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Enumerate measures taken by government  to enhance the sources of capital for infrastructure financing in India?
            Ease of compliance for small businesses: Small businesses constitute the backbone of our economy. In order to reduce the compliance burden of small businesses and professionals, following measures have been taken by this Government: (i) Threshold for presumptive taxation of businesses was raised from Rs. 1 crore to Rs. 2 crore. (ii) For maintenance of books of accounts by individuals and HUFs, (a) income threshold was raised from Rs. 1.20 lakh to Rs. 2.5 lakh; and (b) turnover threshold was raised from Rs. 10 Lakh to Rs. 25 Lakh. (iii) Presumptive taxation was introduced for professionals having receipts up to Rs. 50 lakh. 5. Measures to incentivise affordable housing and real estate:

            Measures to incentivise affordable housing and real estateHousing has been an area of concern for middle and lower-middle class. Further, real estate sector plays a significant role in generating employment in the economy. Considering the importance of housing sector, this Government has taken the following measures to promote this sector: (i) Deduction of interest on loan taken to purchase selfoccupied house property was increased from Rs. 1.5 lakh to Rs. 2 lakh. (ii) 100% deduction was provided for the income of affordable housing projects. (iii) The base year for computation of long term capital gains was shifted from 1981 to 2001. (iv) Holding period for long-term gain on immovable property was reduced from 36 months to 24 months. (v) Safe harbour of 5% on stamp duty value was provided for the purpose of computation of capital gains on immovable property. 

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            Incentives for start-ups: The condition for carry forward and set off of losses in cases of eligible start-ups is proposed to be relaxed enabling them to carry forward their losses on satisfaction of any one of the two conditions, i.e. continuity of 51% shareholding/voting power or continuity of 100% of original shareholders. Further, the provision which allows exemption of capital gains from sale of residential property on investment of net consideration in equity shares of eligible start-up shall be extended by 2 years. Thus the benefit shall be available for sale of residential property on or before 31st March, 2021. The condition of minimum holding of 50% of share capital or voting rights in the start-up is proposed to be relaxed to 25%. The condition restricting transfer of new asset being computer or computer software is also proposed to be relaxed from the current 5 years to 3 years.







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