Budget 2024 Wishlist: Tax Simplification, TDS Rationalization, and Procedural Easements Among Key Demands

30 Jan 2024 , 12:14 PM

Interim Budget 2024 Presentation:

The Finance Minister, Nirmala Sitharaman, is set to present the Interim Budget on February 1, 2024. Expectations from all sectors of the economy are high.

Tax Rationalization and Simplification: Propose aligning TDS provisions (section 194Q) and TCS provisions (section 206C(1H)) with GST registration status to broaden the tax net. Suggest alternative filing of Annual Information Returns for purchasers/sellers instead of TDS/TCS. Recommend a roadmap for reducing TDS rate disparity, categorizing payments and introducing a small ‘negative list’ for exemptions.

Banks and Financial Institutions: Advocate streamlining the TDS regime by categorizing payments and creating a ‘negative list’ to reduce compliance burdens and avoid disputes.

TDS/TCS Certificate Requirement: Propose eliminating the requirement to issue TDS/TCS certificates, with exceptions for Salary TDS, non-residents, and cases without PAN.

Tax Deduction at Source @ 1% under section 194O: Suggest excluding digital platforms benefiting farmers/FPOs from the scope of section 194O.

Mismatch Between TDS Credit and ITBA: Appreciate efforts for faster refunds and propose resolving internal issues causing mismatches between Form 26AS and ITBA.

Form 26AS/AIS Enhancement: Recommend allowing TDS credit based on Form 26AS, incorporating PAN of the deductor, unique certificate numbers, and invoice-wise break for sales data.

Personal Tax Provisions: Propose a simplified procedure for TDS on immovable property transactions with non-residents. Recommend clarifying criteria for perquisite taxation of electric vehicles provided to employees.

Rationalize Capital Gains Tax Structure: Advocate for a consistent rate structure and holding period for different instruments within the same asset class. Suggest exempting Buy-back Tax (BBT) for listed shares conducted through the ‘open market through stock exchange’ method.

Simplify Procedural Compliances: Call for relief from the onerous compliance burden under section 68 by excluding genuine borrowings. Propose extending the time limit for filing revised returns until the end of the assessment year to accommodate foreign tax credit claims.

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