Budget 2024 Expectations Highlights: Economic Survey highlights strengths, outcomes of reforms, says PM Modi

Tax policy and administration play a pivotal role in shaping the economic landscape of a country. For corporates around the world, the competitiveness of local laws and the associated compliance costs are crucial factors when deciding on investment destinations. These costs include the time and resources dedicated to adhering to tax laws, maintaining records, filing returns, and liaising with tax authorities.

Finance minister Nirmala Sitharaman's seventh Budget will do a tight rope walk as she looks to strike a balance between the need to spend more on social sector schemes amid calls from allies for additional assistance to states, while seeking to address demands for a reduction in personal income tax and yet ensuring that she sticks to the fiscal glide path. Much of the discussion has focused on RBI's higher dividend of over Rs 2 lakh crore coming to govt's aid, but the additional money has already been used for the solar rooftop scheme.Sitharaman will need more funds to roll out PM Narendra Modi's other pre-poll announcement of a new housing subsidy scheme for the poor, while honouring poll promises such as increasing the coverage of Aayushman Bharat to include seniors. There are already demands to enhance the insurance cover to Rs 10 lakh, which requires a political call given that there are complaints of hospitals coming up just to cater to this segment of population.

“Dividend payout needs to take place within 7 days of declaration as per corporate law. However, there are various classes of shareholders (individuals, trusts, Govt companies, FPIs, Mutual funds, insurance companies, NRIs etc.) each having different withholding tax implications. A company needs to analyse all classes of shareholders and apply appropriate TDS rate. For non-resident shareholders, there are additional requirements of examining tax treaties, tax residency certificates, beneficial ownership, MLI impact, filing of Form 15CA/CB on the income tax portal etc. Besides, checking of compliance with Section 139AA/206AB and applying higher TDS rates, have added to the compliance burden,” says FICCI.

Recommendations

• A simplified process may be made available, including the possibility of prescribing a uniform rate of say 10% for payments of dividends by listed companies to all beneficiaries, whether residents or non-residents.
• Relaxation must be provided in filing of Form 15CA/CBs particularly in cases where full tax has been deducted from dividend pay-out to non-residents.

Currently, income tax returns e-filed by taxpayers are centrally processed at CPC, Bangalore u/s 143(1) of the Income Tax Act (Act). The objective for establishing CPC was to expeditiously determine the tax payable or any refund due to the taxpayers or check for any mistakes apparent in the income tax return.

In order to achieve desired objectives of section 143(1) of the Act and CPC Scheme 2011, following measures are recommended for kind consideration of CBDT by CII:

• The anomalies in ITR utility and CPC return processing software as pointed out in foregoing part of these representations may be addressed at the earliest. There may be many such anomalies experienced by large number of taxpayers across the country. While there exists helpline and email support on ITR filing portal, in many cases, taxpayers face difficulty in explaining the issues over a call or on email. It would be good if DGIT (Systems) or relevant offices in CPC hold regional camps to interact with taxpayers and professional/industry chambers to understand such anomalies and appropriate way to address them.
• Scope of processing of income tax returns by CPC should strictly be limited to determination of any tax payable or refund due to the taxpayer or determination of any mistake apparent from the record and not beyond the same. It must be clarified that the scope of jurisdiction of CPC under section 143(1) is the same as jurisdiction under section 154 to rectify errors apparent from record and not delve into debatable issues.
• Instructions may be given to CPC to clarify that adjustments in respect of disallowance of expenditure or increase in income indicated in audit report can be made only in respect of patently disallowable items or inadvertently missed incomes after affording proper opportunity of hearing to taxpayer. In particular, no such disallowance or addition can be made where the issue is covered in taxpayer’s favour by any judicial precedent.
• Any adjustment proposed to be made by the CPC should only be made after providing complete details of the adjustment as well as sufficient time as per law for the taxpayer to furnish a response. The response must be considered by competent officer who can understand the technical and legal nuances of issues involved.
• Rectified applications or rectified return of income filed electronically should be disposed off within reasonable time which will surely eliminate the need to unnecessarily approach the appellate authorities seeking redressal of the unwarranted adjustments. There should be clarity on who can make the rectification and the taxpayer should not be made to shuttle between CPC/Faceless Unit and Jurisdictional AO.

Income Tax Budget 2024 Expectations: Will FM Nirmala Sitharaman provide a big income tax relief to middle class, salaried taxpayers in Budget 2024? From a change in tax slabs and tax rates under the new income tax regime to raising the standard deduction limit and changes in Section 80C limits - the common man has several expectations from the Union Budget 2024. This will be the first full budget of the Modi 3.0 government, and personal experts are anticipating major changes in income tax to bring relief to taxpayers.

Economic Survey 2023-24 ahead of Union Budget 2024: The Economic Survey is a document prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance under the guidance of the chief economic adviser. When will it be presented?

Railway Budget 2024 expectations: ​What should the Railway Budget 2024 focus on? Will new trains like Vande Bharat, Vande Bharat sleeper, Vande Metro, Amrit Bharat get a fillip? What will be the allocation for enhancing safety on the railway network, especially in the light of recent accidents that have led to casualties?

Key expectations from the upcoming budget include:

* Enhanced regulatory framework: Clearer guidelines and a conducive environment for fintech innovation.

* Tax incentives: To promote research and development in financial technology.

* Infrastructure support: Investments in digital infrastructure to facilitate seamless financial transactions.

* Financial inclusion focus: Allocations for expanding financial services to underserved populations.

Income Tax Expectations Budget 2024: There are various Income Tax Return (ITR) Forms tailored for different taxpayer scenarios. Selecting the appropriate tax return filing Form is important to ensure better compliance. Currently, the choice of the relevant Form is left to the taxpayer. It may be good to introduce a feature of recommending the relevant tax return Form based on specific questions posed in the portal.

Ahead of the budget 2024, tech company executives have voiced their expectations, seeking a boost in India’s technology development ecosystem. According to Manoj Nair, head of global delivery centres at Fujitsu, India must take step to bolster digital literacy, emphasis on R&D and establish centres of excellence for innovation.

Rajan Navani, Chairman and President of the Indian Digital Gaming Society backed by the CII, emphasised the sector's potential: "The esports and video gaming sector in India is brimming with potential. We have a massive pool of talented gamers, but to truly compete globally, we need targeted support in the upcoming budget. This includes tax breaks for studios creating original esports and video gaming content, investment in infrastructure to foster development of high-quality games, and initiatives to cultivate a skilled esports workforce."

A key proposal of the crypto community is to decrease the Tax Deducted at Source (TDS) rate on Virtual Digital Asset (VDA) transfers under section 194S from 1% to 0.01%. The current TDA rate, the report states, acts as a deterrent for investors, leading to reduced market liquidity and participation. Reducing this rate the crypto currency community says can stimulate more transactions and promote a more robust trading environment.

Budget 2024 expectations for agriculture: The government can provide a fillip to this sector by laying emphasis on four Vs – volatility, value, vital infrastructure, and vulnerability.

The pharmaceutical industry has some key expectations from the Union Budget 2024, which will provide further impetus to this sunrise sector and contribute to the nation’s future.

Amit Jaipuria, Founder and CEO of Postcard Travel Club, has shared his expectations from the upcoming budget, emphasizing the importance of making sustainable tourism a national priority. He stated, "The government’s intention to make sustainable tourism a national priority for revenue and employment in its third term is a great signal for the travel industry. Policy incentives for making tourism more sustainable should be put in place, and the use of storytelling to showcase regions and cultures should be further emphasized."

Budget 2024 auto sector expectations: As the country eagerly awaits Union Budget 2024-25, the first by the new NDA government led by Prime Minister Narendra Modi, the auto industry seeks continued support. In the past, the government has provided impetus to the industry through multiple incentives schemes like Faster Adoption and Manufacturing of Electric Vehicles (FAME), Production-Linked Incentive (PLI) Scheme, and more.

What can salaried taxpayers expect from Budget 2024 for the new income tax regime? Times of India Online did an exclusive survey of top personal tax experts. Tax experts are divided on the ideal tax income tax slabs and income tax rates under the new tax regime. However, most agree that the 30% tax slab above an income of Rs 15 lakh is still steep and needs to be implemented at incomes of at least above Rs 20 lakh.

Chander Talreja, Partner, Vialto Partners tells TOI, “This year, the government may provide relief to middle income level individuals by tweaking the slab rates further and introducing additional slabs for income ranging between Rs 15 lakh and Rs 20 lakh.”

Sunjae Sharma, Managing Director for India and Southwest Asia at Hyatt, has shared his insights and expectations from the upcoming budget, emphasizing the need for continued support and strategic investments in the tourism and hospitality industry. Sharma reflected on the progress made in the previous year and highlighted key areas that require attention in the forthcoming budget.

Avneet Singh Marwah, CEO of Super Plastronics Pvt Ltd (SPPL), has sought a reduction in Goods and Services Tax (GST) for LED TVs larger than 32 inches. Marwah, said that the reduction in GST will help strengthen its global economic standing.