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Nasscom's Suggestions for Union Budget 2025-26
Nasscom's Suggestions for Union Budget 2025-26

December 2, 2024

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Based on inputs from the industry, Nasscom has submitted a detailed memorandum of suggestions for the Union Budget 2025-26 (Budget) to Ministry of Finance. Our Budget suggestions are encapsulated under the following broad categories:

  1. International Taxation: We have requested the Government to implement measures for giving effect to the Union Budget 2024 announcement to make safe harbour rules attractive and streamline transfer pricing assessment procedure. This will attract growth of GCCs and improve ease of doing business for the IT-BPM MNEs.
    1. Safe Harbour Rules – Increase the threshold, reduce the rates and club the rate categories.
    2. Advance Pricing Agreements – Reduce the time taken to conclude unilateral APAs and reduce the timelines for renewal of APAs where the facts are substantially the same.
  2. Emerging Hubs: Encourage investment and employment in emerging hubs by updating the salary threshold and introduce a provision specifically for emerging hubs without any threshold, through amendment to S. 80JJAA of IT Act.
  3. Special Economic Zones: Enable the technology services industry to effectively utilise the income tax benefit during 11-15th year of operation in the SEZs by broadening the eligible purposes for utilisation of the Re-investment Reserve under S. 10AA.
  4. Start-ups:
    1. Strengthen availability of patient capital for DeepTech Startups in India by:
      1. Setting up a central DeepTech fund,
      2. Creating a grant framework for the DeepTech ecosystem, and
      3. Allowing CSR contributions to approved funds for incubators or R&D projects in the field of science, technology, engineering and medicine.
    2. Make the deferment of the time of payment of tax on Employee Stock Option Plan available to employees of all DPIIT recognised start-ups.
  5. Ease of Doing Business: We have requested to implement a range of ease of doing measures to significantly boost competitiveness for IT-BPM, Ecommerce and start-ups. These measures should boost efficiency for the broader industry. The suggestions include:
  6. Allow carry forward of business loss and accumulated depreciation to all companies under S. 72A of IT Act
  7. Simplification and rationalisation of TDS provisions,
  8. Issues relating to Non-resident/ foreign company,
  9. TDS and Equalisation Levy issues impacting the E-commerce sector,
  10. Litigation management and
  11. Other suggestions for facilitating ease of doing business in India

The detailed Pre-budget memorandum 2025-26 is attached for your reference. Please write to tejasvi@nasscom.in for more information.


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202411_PreBudget_Memorandum_nasscom.pdf

Tejasvi

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