A report by KPMG India suggests that the government should consider increasing the standard deduction for salaried employees and extending deadlines for filing belated tax returns. These measures aim to enhance ease of doing business and address cross-border income reporting challenges. Specifically, the report proposes raising the standard deduction to Rs 1 lakh and allowing more time for revised tax filings, especially for individuals with international investments.
The report also advocates for permitting deductions on housing loan interest against salary income, even for self-occupied properties. This move is seen as crucial in light of the financial burden of home loan repayments and to promote homeownership in the country. Additionally, on the corporate tax front, the report highlights the need for clear exemptions for foreign companies under presumptive tax regimes.
Furthermore, the report emphasizes the importance of providing a minimum alternate tax (MAT) exemption for foreign companies engaged in specified businesses like shipping and civil construction. It points out that the current tax provision can create uncertainties regarding the treatment of certain incomes, such as redemption premiums on debentures, impacting tax calculations and obligations.
In the realm of indirect taxes, the report suggests implementing provisional refund sanctioning for cases of inverted duty structure. This move is expected to streamline refund processes, enhance liquidity, and reduce delays through a risk-based approach, thereby benefiting businesses and taxpayers alike.
