The Banking Sector Wants GST Relaxation in Budget 2022

Expectations for the 2022 Budget: Different industries’ expectations of the government are coming to light ahead of Budget Day. It’s the same in the financial business. Finance Minister Nirmala Sitharaman, who will deliver the Union Budget 2022 on February 1, next week, has a long list of requests for the industry. The banking sector wants the government to pay attention to it during this year’s Budget session, in terms of tax relief and additional perks.

On February 1, when Sitharaman unveils the 256th Budget, it will be obvious whether the government will heed to their demands.

“With digital payments, the next focus should be on digital banking, as many of the accounts opened under the JAN DHAN YOJNA are inactive. On a larger scale, technology should assist the government in realising its goal of transforming India into a digital economy “On Budget 2022, Archana Elapavuluri, Founder of Pickright Technologies, said.

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“By diminishing the use of cash in economic transactions and ensuring people have access to improved financial services and credit, this reform is vital to improve the country’s overall economic efficiency,” she added.

The abolition of GST and TDS on financial services through business correspondents announced in the Union Budget 2022, according to Ram Shriram, founder of BharatATM, will provide seamless services.

“Gentle taxes for self-serviced digital clients has resulted in the growth and adoption of the digital payments sector,” he stated.

“To guarantee that the same benefits are available to residents who are less tech-savvy, our government could consider lowering the GST and TDS for financial inclusion services provided by Business Correspondent (BC) stores across India. The elimination of GST and TDS will assist the industry in lowering the cost of providing seamless financial services “Shriram contributed to the conversation.

Tax breaks and incentives for the banking industry are also likely, according to experts. “Incentives to the banking industry include reimbursement of specific costs or tax subsidies in the form of weighted deductions or 100% depreciation,” Divam Sharma, founder of Green Portfolio, a SEBI licenced portfolio management service provider, explained.

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The Reserve Bank of India (RBI) has established an internal fintech department to focus on the country’s rapidly changing financial sector.

Apart from GST waivers and tax exemptions, experts called for KYC regulations and an NPA perspective in the Budget, which might assist banks mitigate risks.

“To increase efficiency, the regulatory framework and implementation of electronic and video KYC onboarding of customers should be highlighted. To develop a CKYCR (Central KYC registry), a repository of consumer KYC information, technological advancements must be made “Alea Consulting’s founder and CEO, Deepak Bhawnani, stated.

“To increase efficiency, the regulatory framework and implementation of electronic and video KYC onboarding of customers should be highlighted. To develop a CKYCR (Central KYC registry), a repository of consumer KYC information, technological advancements must be made “Alea Consulting’s founder and CEO, Deepak Bhawnani, stated.