Budget 2016: Give tax incentives to India Inc for skill development as CSR
Skill development sector is crucial to PM Modi’s dreams of putting India back on the world map. And this sector is betting big on the upcoming Union Budget 2016. The sector is hoping for tax benefits in a bid to attract more investments for the sector.
“One of the primary tax benefits sought by the skill development segment is that all companies involved in developing skills should be exempted from Income Tax or Service Tax. 200% tax benefits should be given to companies’ spending money on CSR to incentivize them for spending on the segment. Further, if CSR funds are spent on skill training, there is a belief that Government should match the same. The skills segment can further evolve and cater to the country’s growing skill needs if all large industries are motivated to spend transparently on skills training. Money spent by individuals on skilling should also be exempted from tax,” said Sanjeev Duggal, CEO and managing director of Centum Learning.
It must be noted that currently the initiatives implemented by the NSDC has been exempted from service tax. “Only Vocational Training Provider (VTP) courses are exempt from Service Tax although there are many skill courses which do not qualify defined criteria of VTP. Therefore exemptions should be for all Skill projects approved by all ministries and not just on the basis of old framework of VTP courses,” he added.
Players also want income tax holidays for skilling companies. “There should not be (Tax deducted at Source) TDS on payments made by Government. In normal scenario government makes payment only after deduction of TDS, which leads to shortage of cash flow in managing Operations. Tax benefits should be given to companies spending their CSR funds only in the skilling sector,” noted Duggal. At present, all skilling companies have to pay normal Income Tax.
Image Credit: Indiatimes.com
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