Budget 2021: Here's what the Indian startup ecosystem is hoping for
18 January 2021
A progressive surcharge can be a better option
Tax relief to employers: To encourage employers to retain and re-hire employees or avoid layoffs, Canada introduced a subsidy to the tune of 75 percent of wages for qualifying employers. Similarly, Australia introduced a wage subsidy of 50 percent of an existing apprentice’s or trainee’s wage for up to nine months. While no similar subsidies were doled out in India, tax relief in the form of a conditional weighted deduction for salaries paid, corresponding to the impacted period, would aid disrupted employers.
Avoid COVID-19 cess or surcharge: Could taxpayers see a COVID-19 cess or surcharge this Budget? The answer would hinge on how the government plans to fund the fiscal deficit created by the stimulus, and the budgeted spend on vaccination drive. However, between a cess and a surcharge, a progressive surcharge could be a better option as it will not put an equal burden on small taxpayers.