Govt favours a

TIMING IT RIGHT Early presentation will ensure passage before fiscal year-end and allow taxpayers to plan better

NEW DELHI: The government is looking to advance the budget presentation by a month to January from next year, a move that will allow individuals and companies more time to firm up savings and tax payout plans.

The budget is usually presented on the last working day of February, a month before the new financial year begins on April 1.

“No final decision has been taken so far, but the ministry is examining the idea to advance the date of presenting the budget,” said a finance ministry official who did not wish to be named.

The move will need bipartisan political support as it will involve advancing the Parliament’s budget session at least by a month.

The Congress was not in support of the plan.

“What is the logic behind changing a time-tested method? If the budget is presented in January, the finances of the country will not be clear by then,” said Veerappa Moily, the Congress’s Lok Sabha MP and a former law and corporate affairs minister.

A January budget would leave little time between Parliament’s winter session, which usually ends in the last week of December, and the budget session that begins in the third week of February. Taxpayers will get two months to adjust personal finances and investments according to new tax provisions in the budget

Companies will get more time to start provisioning for advance taxes keeping in mind changes in the corporate tax structure

Indirect tax changes proposed in the budget will be applicable from April 1, ending confusion as some are currently applicable from June 1

“If the budget is presented in January, there will be overlap of the winter and budget sessions of Parliament. Parliamentary work will be hampered,” Communist Party of India leader Gurudas Dasgupta said.

Tax experts said the new proposal will aid better tax and accounts planning.

“Presenting the budget in January will give two months’ time to individuals and corporate to realign their plans,” said Girish Vanvari, national head of tax at KPMG.

Though the budget is presented in February, several tax proposals kick in only from June after Parliament passes the annual finance bill in May.

For instance, service tax was increased to 15% from 14% from June 1 this year, though the finance minister announced the change in the budget presented on February 28.

Income tax changes come into force only after the finance bill is passed, but these are retroactively implemented from April 1.

Parliament passes the budget >>P14

through a two-stage process. A vote on account is passed in March to meet necessary expenses on employees’ salaries and other costs for two to three months.

The finance bill, which contains tax changes, and the demands and appropriation bill, which spells out full year expenditure details, are passed in May.

Political pressures often force tax changes proposed in February during the finance bill’s passage in May.

CONTINUED ON PAGE 4