2024 Budget Expectations and Insights from BMR Legal

BW Online Bureau Jan 30, 2024

Personal Income tax

1. Further simplification of the personal tax regime must be the priority. Apart from the above, tax rationalisation measures such as (i) personal tax relief by raising the threshold limit for personal income tax; (ii) increasing the Standard deduction threshold from INR 50,000 to INR 1,00,000; (iii) increasing the limit for deduction under Section 80-C of the IT Act; (iv) enhanced flexibility of switching between tax regimes.

Simplified Capital Gains Tax regime

2. Removing the inconsistency in Capital gains tax rates and holding period for different types of instruments falling within the same asset class.

Simplifying withholding tax-related provisions

3. Presently, there are more than thirty provisions under the Income Tax Act of 1961, withholding taxes and TDS with varying ranges. The withholding tax regime must be simplified.

Income tax benefits on Export

4. The Government must consider granting Income tax incentives in the form of a reduced rate of tax for income generated from the export of both goods and services.

Streamline the Advance Pricing Agreement (APA) and Mutual Agreement Procedure (MAP) regulations

5. The scope of APA provisions should be widened to make the bilateral APA process more accessible to taxpayers having PEs in other countries. Further, fixed timelines must be provided for the closure of APAs for transactions (especially where APAs have been concluded in similar cases).

Acceleration for adoption of Electric Vehicles

6. To accelerate the adoption of EVs, the government must consider increasing the scope of deduction with respect to the purchase of electric vehicles and clarity on perquisite tax treatment as regards the provision of electric vehicles by an employer to its employees.

7. The current limit of Rs 1,50,000/- for deduction for interest paid on a loan for the purchase of electric vehicles must be increased.

8. Simplify the Customs regime for imported EVs in semi-knocked down and completely knocked down conditions. Exemptions must be granted on parts imported for the manufacture of EVs, including Lithium-ion batteries.

PLI Scheme

9. The government must provide fresh allocation for PLI Schemes in new sectors, including the railway sector and the defence sector.

Regulation for emerging technologies such as AI and Blockchain at the enterprise level

10. There must be clear regulations for emerging technologies such as AI and Blockchain to avoid misuse and discourage any money laundering. Further, initiatives must be launched to promote awareness, education, and ease of implementation of such technologies.

GST Returns Revision

11. Taxpayers must be allowed to file a revised annual GST return form. This shall enable the taxpayers to rectify errors in the GSTR-9 form, particularly for B2B transactions.

12. Implementation of the recommendations made during the 52nd GST Council Meeting.

13. Expedite setting up of GST Tribunals across the country for disposal of appeals.

Digitalisation of customs litigation process

14. As a taxpayer facilitation measure, the adjudication and appeal process must be digitised, and an option must be given to taxpayers to file objections and appearance through virtual modes.

For the opportunity to have your budget analysis featured in BW Legal World, kindly forward your piece to the Managing Editor, Ashima Ohri, at ashima@businessworld.in. Please note, submission does not ensure publication.