The government will ensure there is no action against honest companies that bring genuine money at a premium, interim finance minister Piyush Goyal said, assuring the startup community that they would not be unnecessarily targeted over the so-called angel tax.
In his reply to the debate on the interim budget in the Lok Sabha on Monday, Goyal dismissed allegation of fiscal slippages, saying the budget has been very “honest” with numbers. The Lok Sabha later passed the interim budget for fiscal 2020 by voice vote, amid a walkout by the Congress, NCP and CPM members.
Replying to a question on the budget not looking into the issue of angel tax, Goyal said the government would take measures to protect genuine investments that were brought in at a premium.
Some startups have received notice under the so-called ‘angel tax’ where the share premium received in excess of the fair value was treated as income from other sources and taxed under a provision introduced under Section 56 to prevent money laundering.
“The government is taking hard steps to ensure that action is taken against bad companies,” he said, adding that no action of any kind was taken against honest companies that had brought “genuine money” at a premium. “We will protect honest people and give harshest punishment to the dishonest,” he said, amid continuous shouting by some opposition members during his reply.
Goyal dismissed the charge that the government had made important tax changes and policy announcement in the interim budget, even as he pointed to the tax proposals in the interim budget of FY15.
“They could not even wait four months and reduced tax on SUVs … which farmer buys SUVs,” he said, hitting out at the Congress that was in power at the time. The government has not changed any tax rate in the interim budget, he said .
He said the fiscal deficit for FY19 came in at 3.367% of GDP in the interim budget, which on rounding off became 3.4%. The budget for the year had estimated the deficit at 3.3% of GDP.
Goyal said if the government had reduced spending by just Rs 5,000 crore or raised revenue by that much, the 3.3% target would have been met. “The government would not have had any difficulty in cutting spending by Rs 5,000 crore,” Goyal said, adding that the Prime Minister wanted to present an ‘honest budget’ and asked for whatever figures came in to be presented to the country. Similarly, a Rs 1,500-crore reduction in FY20 would have reduced deficit to 3.3% of GDP against 3.4% provided in the the budget, he said, presenting the government’s record on consolidation. He said the Narendra Modi government inherited a fiscal deficit of 4.5% that now improved to 3.4%.
PM KISAN SAMMAN
Goyal said the Modi government had taken a lot of initiatives in the past four-and-half years for the benefit of the poor, farmers and the middle class and the 2019-20 interim budget was a continuation of that. On the PM Kisan Samman Nidhi, under which small farmers would be provided Rs 6,000 a year, Goyal said those living in palaces would never understand the importance of Rs 2,000 every four months and hence they “belittle” the scheme.
The Congress party had said the amount was too little .
Goyal said the scheme would cost Rs 75,000 crore in FY20 and Rs 20,000 crore in the ongoing fiscal year. In contrast, he said, the only benefit from the UPA government to the farmer in its 10 years was a Rs 52,000-crore loan waiver. “Perhaps people (living) in big palaces with lot of inheritance, the namdaars won’t understand what this amount means for small and marginal farmers,” he said.
Source : PTI