Banking, FMCG to gain from tax cut; pharma, IT to remain untouched: Report

Giving a sectoral analysis of the impact of tax cut, ICICI Direct Research said domestic auto equipment makers will tend to benefit from the tax cut.

The government's big announcement of a cut in corporate tax will benefit sectors such as banking and FMGC but IT and pharma may not see any tangible benefits as their current effective tax rate is lower, ICICI Direct Research said in a report.

"Like a bolt from the blue, the government (on Friday) announced a reduction in the corporate tax rate from close to 35 per cent to 25.17 per cent thereby fulfilling its key agenda of implementing the Direct tax Code (DTC). This is a massive trigger for revving up growth and, more importantly, resurrecting sentiments that were down in the dumps," the report said.

The immediate benefit is increased cash flows to corporate India that will be either channelised into debt reduction or incremental investments in increasing capacity.

Also, taxing new production facilities (that come up by 2023) at 15 per cent will enable attraction of global capital and spur a beleaguered investment cycle, it said.

"From a granular perspective, sectors like banking and FMCG are expected to grow at a CAGR of 48.2 per cent and 18 per cent, respectively vs. earlier CAGR of 42.2 per cent and 12.2 per cent. On the flip side, sectors like IT and pharma are not expected to see any upgrades on account of existing lower tax rates," it said.

A new provision has been inserted in the Income-Tax Act with effect from FY20 which allows any domestic company the option to pay income tax at 22 per cent subject to the condition that they will not avail any exemption/incentive.

The effective tax rate for these companies shall be 25.17 per cent inclusive of surcharge and cess. Also, such companies shall not be required to pay Minimum Alternate Tax.

In order to provide a boost to 'Make-in-India' initiative of the government, a new provision allows any new domestic company incorporated on or after October 1, 2019 to make fresh investment in manufacturing, an option to pay income tax at 15 per cent. This benefit is available to companies that do not avail any exemption/incentive and commences their production on or before March 31, 2023.

Business Standard

Review: Indian Air Force A Cut Above lets you become a virtual IAF fighter

Overall, the Indian Air Force: A Cut Above seems to be a joyful game to experience the different roles of an IAF personnel.

Indian Air Force on July 31 launched the ‘Indian Air Force: A Cut Above’ mobile game commemorating platinum jubilee of its dedicated service to the nation. Available for both iOS and Android mobile phone platforms, the game allows the user to experience roles of an IAF warrior through a game play that looks realistic. Let’s take a look at the game’s first impressions:

The Indian Air Force: A Cut Above is not graphic intensive. It has a moderate size of around 300MB (Android), which makes it compatible with most smartphones, entry-level or flagships.

Currently, the game supports single player missions, and its full version with multiplayer support is expected to be released sometime in October.

Abhinandan written on it. Therefore, it seems the game is a tribute to Abhinandan Varthaman, a wing commander with Indian Air Force, who had shot to fame when footage of his captivity in Pakistan had emerged, showing him displaying a brave front, after his MiG-21 was shot down in a dogfight post the Balakot airstrike by the IAF.

Speaking of the in-game action, the Indian Air Force: A Cut Above starts with a training session in which you are trained to fly the fighter jet, manoeuvre it, identify target areas, fire ballistics on static and moving targets, and land the aircraft safely. Once the training is complete, you get to play the missions. The game has ten missions and each mission has different objectives. Interestingly, not all mission involves fighting the enemy; some missions are based on IAF’s humanitarian and disaster relief tasks to aid civil authorities.

Overall, the Indian Air Force: A Cut Above seems to be a fun game to experience the different roles of an IAF personnel. While the game’s missions have different objectives, the narrative of each mission provides enough adrenaline to keep you engaged. The game will get more engaging when it starts supporting multi players.

Business Standard

New direct tax code panel report to overhaul I-T Act delayed by 15 days

This is the second extension for the taskforce under the CBDT member Akhilesh Ranjan.

The much-anticipated report on the new direct tax code (DTC) to overhaul and simplify the 58-year-old Income Tax Act has been pushed back by a fortnight. The taskforce, set to submit the report on July 31, was handed a 15-day extension at the last minute to incorporate views of the new members, said the official statement.

“The government has allowed the task force to submit its report by August 16, in light of the fact that the new members… requested for more time to provide further inputs,” the government said in a release.

The government had last month expanded the scope of the taskforce to look into five more areas and nominated two new members — Chief Economic Advisor (CEA) Krishnamurthy Subramanian and Joint Secretary (Revenue) Ritvik Pandey.

“The report was all set to be submitted today (Wednesday), but CEA Subramanian wanted to give additional inputs, hence the deadline was extended,” said a government official.

The new terms of reference included faceless and anonymised scrutiny, mechanism for system-based cross verification of the financial transactions, reduction in litigation and expeditious disposal of appeals.

This is the second extension for the taskforce under the Central Board of Direct Tax (CBDT) member Akhilesh Ranjan. Earlier, the committee was supposed to submit its report by May 31, but then finance minister Arun Jaitley gave a two-month extension to complete the exercise.

In fact, the earlier report led by former CBDT member Arbind Modi with same terms of reference was not accepted by then finance minister in September last year, on the grounds that all members could not arrive at a consensus.

The proposed DTC is aimed at reforming complex income tax laws into simpler tax codes with reduced rates, fewer exemptions and tax slabs. Once the draft report is ready, it will be put up for public suggestions to address the concerns of all stakeholders.

Business Standard