The Government is expected provide a more rationalised TDS framework to reduce the compliance burden for taxpayers, besides a revamped new concessional tax regime by providing additional benefits like standard deduction, EY said on Sunday. The Budget wishlist of EY also highlights that the Government should provide some respite to low- and mid-income taxpayers with annual income up to Rs 20 lakh on the personal income tax side.
Also, possibility of ‘green’ incentives to be introduced such as tax exemption to interest from green bonds and rationalisation of capital gains rates and holding periods could be expected in the Budget, to be unveiled in Parliament on February 1.
With regard to Tax Deducted at Source (TDS), the EY said that currently, 31 sections under the Income tax Act deal with different types of payments to residents, where the withholding tax rates vary from 0.1 - 30 per cent.
“The Government may provide a more rationalised TDS framework to reduce the complexity and compliance burden for taxpayers,” EY further said. “There could be simplification in the Tax Deducted at Source (TDS) procedures pertaining to NR (non-resident) individuals,” EY said. Investment and production-linked incentives may be considered for strategic sectors that can strengthen ‘sustainability’ or lead to energy efficiency,” EY said.