Defence Minister Nirmala Sitharaman. (Copyrights: IANS)
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New Delhi:

Finance minister Nirmala Sitharaman will meet groups of stakeholders from Monday to seek inputs from each sector on their concerns and how the growth, consumption, demand, and industry will be revived from the 4.5 percent GDP growth.

To begin with, the Finance Ministry said Sitharaman will meet the stakeholder groups of ‘New Economy: Start-ups, Fintech and Digital Sector’ on Monday morning, and financial sector and capital market representatives later in the afternoon.

The capital market players may seek replacement of Dividend Distribution Tax (DDT) with the classical system of dividend taxation in the hands of the shareholders with protection for small shareholders and avoiding cascading impact of inter-corporate dividends through provision akin to erstwhile section 80M deduction. This will also remove the necessity to impose a Buyback Distribution Tax.

Officials said the pre-Budget consultations starting Monday will last till December 23.

An Foreign Portfolio Investment (FPI) executive said that under the Section 112A, Tax on Long Term Capital Gains Consistent with the scheme of capital gains chapter, the benefit of substitution of FMV (Fair Market Value) as on January 31, 2018, may be extended to the donee or legal heir or merged entity, who acquires shares post-April 1, 2018, but were the predecessor held qualifying asset as on January 31, 2018.

This will be consistent with the capital gain scheme where donee, legal heir or merged entity, etc. steps into the shoes of the predecessor as the cost and holding period is substituted. Further, the grandfathering benefit may also be extended to shares held in amalgamating/demerged listed company on January 31, 2018, instead of which shares are received in amalgamated/resulting company post-January 31, 2018.

The discussion with the industry on December 19 will revolve around ease of doing business, regulatory environment impacting private investment, export competitiveness, the role of the state (delayed payments, contract enforcement), and revival of private investment and growth, among others. Sources said these are the defined areas of discussions.

With the already significant cuts in corporate taxes having taken place, expectations and demands are high that it would announce some relief for the salaried class by making changes in the personal income tax structure.

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