Budget 2024: India Inc Expects Govt To Focus On Six Key Taxation Points

New Delhi: Though there has not been any official announcement on Budget dates, expectations are high that  Finance Minister Nirmala Sitharaman will present the annual annual financial statement before Parliament in July.

EY has prepared the expectation deck for the upcoming budget, wherein it has highlighted expectations from several counters regarding on tax policies, compliance, dispute resolution mechanisms and more.

EY in its report has highlighted 6 key demands on taxation from India Inc. 

1. Relaxation from Angel tax provisions

Certain class of persons such as Foreign Portfolio Investors, companies listed on recognized stock exchanges etc should be exempted from angel tax.

As they are already subject to stringent regulations and have a lower risk of circulating unaccounted money.

2. Relook at Significant Economic Presence (SEP) provisions

SEP should be removed from Income tax Act in light of new Pillar One framework.

Alternatively, suitable guidelines should be issued to clarify the methods for determination of profits attributable to SEP

3. Timely disposal of rectification petitions and orders giving effect

The digitisation of the process for the will bring in transparency and accountability.

The additional interest of 3% p.a. u/s. 244A(1A) may also be extended to delayed disposal of rectification applications

4. TCS on Employee Stock plans

Employee contributions towards ESOP/ ESPP programs of their employer’s should be carved out of the TCS provisions

Alternatively, suitable amendments should be made to enable employers to consider the TCS credit available to the employees while determining the TDS liability on the salary income.

5. Buy-back distribution tax (BBT)

BBT should be exempted in case of listed shares wherein buy-back is under ‘open market through stock exchange’ method as it results in double taxation in hands of the company (as BBT) and shareholders (as capital gains or business income) 

6. Encouraging employment generation

The monthly remuneration limit to avail tax deduction may be enhanced from the current level of Rs 25,000 to Rs 1,00,000 to give boost to employment at higher levels.