As the eagerly awaited Budget 2024 approaches, taxpayers are looking forward to potential changes that could simplify and enhance the personal taxation landscape. Notably, this Budget is an interim measure, given the upcoming elections later in the same year. The subsequent government will be tasked with crafting the comprehensive Budget.
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Tapati Ghose, Partner at Deloitte, offered her insights and expectations for the forthcoming Budget, highlighting key areas.
Take a look:
Expectation 1: Ease of tax compliance
Simplifying TDS compliance for home buyers with non-resident sellers
Current provisions require home buyers to deposit 1% of the purchase value as tax deposit at source (TDS) when the property value exceeds ₹50 lakh. The process is straightforward for resident sellers but complex for Non-Resident Indian (NRI) sellers.
Ghose suggests easing the TDS process for NRIs to align it with that of resident sellers, simplifying the transaction for all parties involved.
Enabling tax payments from overseas bank accounts
To facilitate non-resident taxpayers, Ghose recommends allowing tax payments from overseas bank accounts, eliminating the need for an Indian bank account.
This move would enhance convenience for taxpayers residing abroad.
E-verification using OTPs to foreign mobile numbers
Ghose proposes extending the e-verification process to foreign mobile numbers, streamlining the verification process for non-resident individuals.
This would reduce paperwork and administrative tasks, promoting a more efficient tax return filing process.
Tax refund to overseas bank accounts
To address challenges faced by non-resident individuals leaving India, Ghose suggests allowing tax refunds to be credited to foreign bank accounts for PAN-holders registered as non-residents or foreign nationals.
Expectation 2: Enhancements to AIS
Expanding information captured through AIS
Ghose advocates for expanding the information captured through the Annual Information Statement (AIS) to include transactions like the Employer Provident Fund, Public Provident Fund, National Pension Scheme, and more.
This would provide a comprehensive view of tax return preparation.
Adding details to AIS information
Ghose proposes adding details such as the date and cost of acquisition to the information captured through AIS for securities and mutual funds. This addition aims to simplify the computation of capital gains, reducing the burden on taxpayers.
Policy recommendations and expected impact
Tax credits for taxes paid outside India
Ghose recommends issuing guidelines for considering benefits under Section 90 at the time of tax withholding, preventing refund scenarios and cash flow issues for individuals claiming benefits in their income tax return.
401K benefit
A new section in the Income-tax Act has been proposed to defer taxation of income from foreign retirement funds.
Ghose suggests enabling this section to be applied retrospectively to benefit taxpayers who withdraw from the retiral benefit and their past contributions.
Revised/belated return filing
To address challenges faced by Resident and Ordinary Residents (ROR) claiming foreign tax credits, Ghose recommends extending the due date for filing revised/belated returns until March 31, allowing for accurate computation based on finalised overseas returns.
Bengaluru to be considered a metro city
Ghose highlights the incongruity between Bengaluru's recognition as a metro city and its non-inclusion in the list of metro cities for tax purposes.
She recommends allowing Bengaluru employees a 50% deduction for House Rent Allowance (HRA) to reflect the city's increased cost of living.
(Edited by : Amrita)
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