Topics In Demand
Notification
New

No notification found.

Post Budget Memorandum 2024-25
Post Budget Memorandum 2024-25

August 7, 2024

80

0

Nasscom welcomes a growth-oriented Union Budget 2024-25 (Budget 2024) that lays a robust foundation for India's long-term growth, with a clear focus on job creation and skill development. It is particularly encouraging to see the continued emphasis on technology as a fundamental driver of progress across various sectors. From fostering start-ups and attracting investors to advancing manufacturing, agriculture, solar power, and the space economy, it seeks to leverage both traditional and contemporary avenues for sustainable progress.

The announcements on abolition of angel tax as well as 2% equalisation levy, reduction in rate of Tax Deduction at Source (TDS) from 1% to 0.1% for ecommerce operators and allowing credit of Tax Collection at Source (TCS) against TDS on salary will go a long way in facilitating ease of doing business in India and will provide certainty to the taxpayers.

Further, the announcement to expand the scope of safe harbour rules and the proposal to undertake comprehensive review of income tax law are a welcome step. This is an important announcement in line with nasscom’s recommendations. Once done, this would make India’s transfer pricing regime more attractive and competitive, boost Information Technology (IT) exports and ease business for Global Capability Centres (GCCs) and the IT services industry. Nasscom is keen to engage proactively with the government on this important initiative. We believe that industry input will be crucial to ensuring that the revised rules and regulations effectively address the needs and challenges of the dynamic IT sector. To this end, we are currently working on a detailed whitepaper that aims to set the overall context of the growth of the GCC industry in India and provide recommendations on changes that can be made in the current safe harbour regime, extending it to TP assessments, to address the challenges faced by the GCC industry around prolonged transfer pricing disputes.

Over the last month, we have consulted the industry on the proposals announced in the Budget 2024. Based on the feedback from Industry, we have submitted a detailed post budget memorandum to Ministry of Finance highlighting our concerns and recommendations to strengthen the Budget proposals. Our focus is with respect to the possible unintended outcomes of some of the proposals and implementation related concerns. As part of our suggestion, we have requested the government to abolish S. 56(2)(viib) of Income Tax Act, 1961 (IT Act) from retrospective effect (i.e., w.e.f AY 2013-14), align the language of proposed sub-clause (f) of S. 2(22) with other sub-clauses of S. 2(22) by including a reference to accumulated profits, proposal to include unlisted bonds and unlisted debentures proposed in Finance Bill, 2024 as an amendment to S. 50AA of IT Act should be omitted, introduce an enabling provision under the IT Act to provide that any EL paid in excess of the actual EL liability can be adjusted against income tax liability, if any, for that year, amongst others

The detailed document is attached for your reference. 

In case of any feedback, please write to tejasvi@nasscom.in


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


Download Attachment

20240807-postbudgetmemo-nasscomsubm.pdf

Tejasvi

© Copyright nasscom. All Rights Reserved.