iWorld
Budget 2020 proposals offer few benefits to M&E industry: EY India
MUMBAI: As always, the industry's hopes from union budget 2020 were high. According to a report from EY India while the budget proposals offer few benefits to the industry, some of the changes may have a material impact which will need to be assessed.
“The budget proposals will provide relief to the foreign companies earning income such as license fees from making compliances in India, provide clarity and do away with avoidable tax litigation through reduction in withholding tax rate for technical fees as well as withholding tax provisions for e-commerce operators. New media and digital business qualifying under start up incentives will get additional impetus from the measures proposed. Reduction in newsprint import duties will help print industry which is going through a tough business cycle. Tax amnesty scheme for resolution of pending litigation offers an opportunity to reassess the tax game in the country,” the report adds.
The report states that the proposed alternate personal tax regime will be relevant to mass employment by the industry in its content production processes, however, it is difficult to determine whether the regime will provide a material differential cash surplus to the employed.
It also adds that expansion of domestic tax regime will lead to tax uncertainty for foreign companies with no resource to any credible advance ruling mechanism which will allow them to understand their tax position upfront.
“Removal of exclusion relating to theatrical receipts would certainly put pressure on the finances of the film businesses with a 10 per cent withholding tax rate and increase their compliance burden. The uncertainty attached to film business certainly makes a strong case for a rate much lower than applicable 10 per cent withholding tax rate. Increase in import duties will lead to increased cost for businesses,” it adds.
Key impacts:
· Withholding tax rate on “fees for technical services” reduced from 10 per cent to 2 per cent, reducing potential litigation on withholding tax rate on content production services and certain other services which do not qualify as “professional services”.
· Exclusion of consideration from “sale, distribution or exhibition of cinematographic films” removed from “royalty” definition that may make theatrical and other receipts from exploitation of cinematographic films taxable and subject to withholding tax at 10 per cent.
· Expansion of domestic source rule will bring to tax income of a nonresident from (i) advertisements targeted at a customer located in India
(ii) sale of data collected from a person in India and (iii) sale of goods or services using data of customer located in India.
· The list of services subject to Equalisation Levy provisions remain unchanged.
· Exemption provided to non-residents earning royalty and fees for technical services from the requirement of filing a return of income, subject to fulfilment of stated conditions.
· Relief provided d to the print industry by reduction in customs duty on newsprint and paper.
e-commerce
Visa report tracks rise of India’s affluent, experience-led spending
Affluent base doubles to 130 lakh, travel 58 per cent of elite spends.
MUMBAI: In India’s new luxury playbook, it’s less about owning more and more about living better. A new whitepaper by Visa Consulting and Analytics (VCA) maps a decisive shift in India’s affluent economy, where spending is becoming more intentional, experience-led, and closely tied to personal identity rather than pure income growth.
Titled India’s Affluent Economy 2025–2026, the report draws on a Visa-commissioned Yougov study and VisaNet data across travel, dining, retail and lifestyle categories. The headline number is hard to miss: individuals earning over Rs 10 lakh annually have nearly doubled from 69 lakh to 130 lakh, significantly expanding the country’s discretionary spending base.
But it’s not just about scale, it’s about behaviour. As consumers move up the affluence ladder, discretionary categories are taking a larger share of credit card spends, positioning cards as key enablers of premium, lifestyle-driven consumption.
The geography of wealth is shifting too. Affluence is no longer confined to metros such as Mumbai, Delhi and Bengaluru, with cities like Ahmedabad, Surat, Jaipur and Lucknow increasingly mirroring metro consumption patterns.
The report highlights a clear pivot from ownership to access. More than 50 per cent of affluent consumers now use cards for elite memberships, while 7 in 10 are drawn to limited-edition drops and curated collections. Increasingly, luxury is defined by seamless access be it concierge-led travel or curated dining where time saved is as valuable as money spent.
Spending patterns reinforce this shift. Among the ultra-elite, travel accounts for 58 per cent of discretionary spends, far outpacing retail and luxury combined at 28 per cent. Cross-border spending penetration stands at 63 per cent, signalling a growing global outlook among India’s affluent.
Closer home, indulgence is becoming routine. Nearly 4 in 5 affluent consumers dine at premium establishments at least three times a year, while 1 in 4 visit luxury venues more than five times annually. Dining spends are also climbing, with Rs 20,000 emerging as a new entry-level benchmark per experience and Rs 50,000 marking premium territory.
Retail, meanwhile, is becoming more selective. Three in four affluent consumers make a high-end purchase at least once a quarter, while one in four shops premium every two weeks. Luxury retail intensity is also rising, with 2 in 5 consumers spending over Rs 5 lakh annually, and a smaller but significant segment exceeding Rs 10 lakh.
Technology and wellness are carving out new roles in this ecosystem. High-end gadgets now see average spends of Rs 60,000 or more per purchase, while ultra-elite consumers are eight times more likely to visit spas and show five times higher engagement with cosmetic stores than non-affluent groups.
The broader takeaway is structural. Affluent consumers are no longer buying products, they are buying ecosystems. Integrated experiences across travel, dining, wellness and payments are becoming central to how this segment lives and spends.
As India’s affluent base expands beyond metros and aligns more closely with global consumption patterns, the real opportunity lies not just in size, but in speed. For brands, the message is clear: relevance will be defined by how early and how seamlessly, they plug into this evolving lifestyle economy.
