Budget 2019: Corporate tax regime needs to be rationalised, market experts said.

Finance Minister Nirmala Sitharaman will present the Budget for full financial year 2019-20 on July 5. Market participants will closely watch out for any announcements to spur economic growth, which has hit a five-year low in the March quarter, putting India behind China in terms of fastest growing major economies. Market experts expect the finance minister to announce steps to reduce corporate tax, ensure transmission of lower interest rates to the end-user, and steps for revival of consumption to boost the economic growth. (Also Read: Budget 2019: Key Things To Know Before July 5)

"We need to have a reasonable tax regime for corporates as multiple taxes deter investors to invest in India and a roadmap towards that will be watched out in the Budget 2019," AK Prabhakar, head of research at IDBI Capital Market, told NDTV in a telephonic conversation.

"There are multiple times the companies are taxed for example dividend paying companies after paying corporate tax they have to pay dividend distribution tax and the end user who gets dividend more than Rs 10 lakh has to pay another 10 per cent as tax to the government and as a result many companies are not paying dividends rather they are going for share buybacks," he added.

Globally, if India has to be a good place for investment, the corporate tax slabs for then we need to be lowered, Mr Prabhakar said.

Sanjeev Bhasin, EVP-markets and corporate affairs at India Infoline, said: "The government should ensure that the pass-on effect of lower rates goes to the end-users. Secondly the government should take steps in Budget 2019 to resume growth in consumption, investment and exports as these are the cornerstones of the economy and there should reduction in corporate tax or an indication of some reduction in corporate tax as tax collections are huge as finance minister has said that there are over 7 crore assessees who have filed tax returns."

Long Term Capital Gains Tax has been "a no brainer" and there should be rationalisation of LTCG, said Mr Bhasin. LTCG was reintroduced but securities transaction tax (STT) was not eased, he added.

The government had reintroduced Long Term Capital Gains Tax (LTCG) in Budget 2018, the last budget presented by then Finance Minister Arun Jaitley.