The devil or the angel is going to be in the fine print

Daksha Baxi, executive director, Khaitan & Co:

• It is visible that the finance minister is doing a tight rope walking in the budget is visibly see. The devil or the angel is going to be in the fine print:
• The commitment to keeping to the fiscal discipline of  deficit of 3.5% of GDP is laudable but the question remains how they will manage it. Hence the credibility of this may be suspect
• Slightly socialistic overtone of the budget, dotted with some relief measures for industry
• The special lower income tax regime of 10% on income from licensing of  patents developed and registered in India is a major push to the innovation box and should spur and inspire locating of intellectual property in India and reduce the outflow of IP from India. This is a major initiative, accepted on the recommendation of the knowledge based industries
• Ducking the fear of change in long term capital tax regime and on the contrary reducing the holding period for unlisted shares to 2 years from 3 year period is  a good compromise and should be seen in positive light
• Deferring application of POEM for determination of residence of foreign companies is a significant relief, especially for Indian companies having overseas subsidiaries and should give them sufficient time to re-organise their affairs
• Special measures announced for agriculture sector coupled with certain additional taxes on the higher income should be seen by the masses to confirm the government's commitment to better the lives of farmers
• While the total outlay on infrastructure has been pegged to be the highest so far, it remains to be seen if this will act as an incentive to kick-starting investment decisions in the country
• Some amount of relief to the small tax payers is coupled with 10% additional tax  on dividend  income above Rs 10 lakhs and additional surcharge of 3%, increasing the rate of surcharge for higher income to 15%. This may have some negative impact on the equity infusion in companies
• The asset reconstruction sector would  get a boost on account of complete pass through of income-tax to securitization trusts including trusts of ARCs
• Making distribution of income by SPVs to REITs and INVITs having specified shareholding will not be subjected to DDT, which should be seen in  positive light
• Despite not-so encouraging response to the Black Money Law, it is interesting to see that the government is looking to  unearth domestic undisclosed income by offering immunity to taxpayers to come clean. Undisclosed income represented in the form of any asset can be legalised by paying a tax of 30%,surcharge of 7.5% and penalty pegged at a low rate of 7.5%,aggregating to a 45% tax rate with immunity from prosecution can be seen as encouraging.