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June 29 To July 5, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 35Expectations of MSMEs
V.K. SUBRAMANI
CA
Brief Introduction
- Micro-Small and Medium Enterprises (MSMEs) provide
maximum employment next to agriculture. These units are
the outcome of the past experiences and entrepreneurial
talent of certain individuals. Many such units continue to
remain as MSMEs only. However, only of a fraction of them
blossom into corporate conglomerates. The MSMEs have a
legitimate demand to seek certain concessions and reliefs
in the forthcoming Budget, 2019. Some of them are listed
as under.
Expectations of MSMEs from for incoming Budget, 2019
2.(i) Reduction in tax rate - The rate of corporate tax is 25%
where the turnover of the company does not exceed ` 250
crores. The corporates are eligible to claim payment of salary
to directors as expenditures. On the other hand, in the case
of partnership firms payment of salary to working partners is
moderated by section 40(b). The resultant profit of partnership
firms (including LLPs) is taxed @ 30%. This is regardless of
the turnover of the firms. It is fair and reasonable that the
tax rate for partnership firms is kept on par with corporate
rate of tax of 25% by linking it to turnover limits.
(ii)Fillip for education expenses - To encourage education of
girls, tuition fees paid to them may be given extra deduction
of `50,000 by inserting a separate section in Chapter VI-A of
the Income-tax Act. Even expenditure for foreign education
of girls may be permitted for further emancipation and
encouragement to them.