More half of the professionals responded to a survey expect 500 basis points cut in corporate tax to 25 percent in the Budget which will be presented on Thursday.
According to a survey by Deloitte covering 120 professionals across the sectors, close to 50 percent feel that tax reforms, particularly tax litigation, should be the most critical priority now for the government. This is followed by reforms in the real estate sector. "Half of the survey respondents (50 percent) expect the corporate tax rate to be reduced to 25 percent from 30 now to all companies as was committed earlier," the survey said.
"Given the strict measures were taken by government around curbing black money, it may be the appropriate time to reduce the tax rate," it added.
Further, respondents felt that given the increase in the cost of living and inflation, there is a need for reduction in tax outgo at a personal level.
Majority of the respondents have placed a high weighting on tax rate reduction by at least 5 percent across all categories (54 percent), followed by raising the exemption limit by at least Rs 250,000 (33 percent) and by bringing back the standard deduction (10 percent).
As per the survey, measures for reduction in personal taxes will make available more funds to an individual who will boost domestic demand and kick-start savings and investment.
Resonating a healthy growth outlook for the economy, the survey found that more than 50 percent of respondents expect growth to remain above 7 percent. "While note-ban and GST led to some market disruptions and subdued sentiment, the economy has of late been showing signs of recovery," the survey said.
"Some of the indicators show a healthy growth including high liquidity, healthy capital inflows, and improving forex reserves. There are strong reasons to believe that consumer sentiment and investment demand might see a turnaround over the next year," it added.