NEW DELHI : Days ahead of Union Budget presentation by finance minister Nirmala Sitharaman on February 1, industry body FICCI has released its pre-budget recommendations for the government. Key suggestions include hiking the Section 80C limit from ₹1.5 lakh to ₹3 lakh, introduction of a PF-like healthcare savings fund, increasing healthcare allocation and sops for the manufacturing industry.
Budget recommendations from FICCI:
1) Increase tax deduction under Section 80C: The government may look at increasing the overall tax deduction limit to at least ₹3 lakh to boost investment.
2) Replace dividend distribution tax (DDT) with classical system of dividend taxation: There is a need to reintroduce the classical tax system of dividend taxation in the hands of the shareholders with protection for small shareholders and avoiding cascading impact of inter-corporate dividends.
3) Preventive health check-ups: It is recommended that tax exemption on preventive health check-ups should be raised from the current ₹5,000 per person to ₹20,000 under section 80D of the Income Tax Act.
4) Profit-linked deduction for affordable housing projects: There is a need for profit-linked deduction for affordable housing projects.
5) Medical reimbursement exemption: Given the significant rise in cost inflation index in general and medical inflation in particular, medical reimbursement deduction needs to be re-introduced and the annual limit needs to be enhanced to not less than ₹100,000 per annum.
6) Healthcare allocation: A large portion of budgetary allocation should be reserved for spending on primary health and on establishing the 1,50,000 health and wellness centres (announced under Ayushman Bharat) which will help to reduce the disease burden.
7) Healthcare Savings Fund: A Healthcare Savings Fund, similar to PF, should be introduced covering all salaried employees and such investments should be allowed as a deduction under Section 80C of the Income Tax Act.
8) Manufacturing industry: Govt should provide support to local manufacturing units in terms of preferred interest rates and priority sector lending.
9) Customs Duty: Indian manufacturers are facing a lot of hardships in competing with the cheap imported cells and modules as they are not subject to customs duty. Imposing of customs duty on these products will enhance the operational capability of the Indian manufacturers.
10) Film exhibition industry: Tax incentives for the film exhibition industry be provided, in order to increase penetration of the exhibition industry in Tier 2 and 3 cities.
11) E-commerce: It is suggested to amend the definition of "industrial undertaking" to include e-commerce so that it is eligible for carrying forward of losses in case of amalgamation/merger/demerger.
12) Media industry: In order to ensure the development of the evolving media and entertainment sector, tax benefits need to be extended to M&E players as well.