Things to Know About Pre-budget Memorandum
The 2020 Financial Year is approaching and the discussion on government’s this year’s budget agenda has already become the hottest news-talks of the country. It is that point of time where people have started pondering over the implications of pre-budget memorandum presented this year. Understanding that this is public’s primary ‘need-to-know’ current affair, we are illustrating what a pre-budget memorandum refers to and what are the main points presented in pre-budget memorandum of 2020.
What are the Suggestions Put Forth by Chartered Accountants Forum?
Institute of Chartered Accountants of India issued a memorandum that suggests certain points to consider prior to the formulation of tax proposals for the year 2020-21. The memorandum has the following sections:
• Part A: Suggestions regarding Policy & Provisions of Income Tax Act, 1961
• Part B: Suggestions regarding improvement of Tax Administration & Citizen Services
• Part C: Suggestions regarding International Taxation
The detailed description of the suggestions put forward by Institute of Chartered Accountants of India can be viewed here.
What are the Suggestions made by the Cost Accountants Forum for Pre-budget Memorandum 2020?
A number of suggestions were put forth by the Institute of Cost Accountants of India (ICAI) forum too for consideration by the Union Government comprise. Plenty of suggestions were illustrated in the memorandum under a number of heads, of which the first thirty suggestions are listed below:
1. TDS Certificates
2. Tax Recovery
3. Tax Rates- Corporate, Non-corporate, Partnership / Individual
4. Stable Tax Rate
5. Corporate Restructuring
6. Taxation on Digital Economy
7. Tax Disputes Resolution / Prevention
8. Taxation of Educational Institution, Section 10 (23C)
9. Imposition of Tax Liability
10. Income Tax Return
12. Tax Incentive Provision
13. Mark to Market Valuation
14. Deemed Expenses towards earning of Exempted Income
16. Deemed Dividend
17. NPS withdrawal
18. Tax Exemption to Infrastructure Capital Cos. / Fund – 10(23G)
19. Disallowance under section 14A read with Rule 8D
20. S.28 (iv)- Income chargeable under profits and gains of business or profession
21. Exemption in case of sale of Carbon Credits- Section 35 and Section 10
22. Deduction in respect of expenditures in eligible projects
23. Deduction in respect for specific reserve
24. Corporate Social Responsibility
25. Disallowance under section 40A (ia)
26. Disallowance under section 40A (i)
27. Depreciation on assets acquired in satisfaction of debts- Section 43
28. Exchange difference on money borrowed in foreign currency in India- Section 43 (A)
29. Foreign Currency Liability Section 43 (A)
30. Maintenance of Books of Accounts- Section 44 AB
The suggestions put forward by ICAI in the pre-budget memorandum extend to more of likewise subjects mentioned. Apart from these, ICAI has also recommended certain general suggestions and technical suggestions among more other suggestions. The existing situation and in depth suggestion for each and every budget topic are explained in detail in the ICAI PDF link provided here for readers who particularly research on the topic.
The cost accountants, chartered accountants and a number of other forums who have the deepest knowledge of the country’s finance and economy system give in their suggestions about where the consideration of Union Government is required the most. With a pre-budget memorandum prepared by a forum of professionals, it is expected that the following purposes will be served:
• Tax collection will be enhanced
• Legal processes shall be reduced
• Justification of Direct Tax laws
• Restricting administrative & procedural curbs pertaining to Direct Taxes like tax avoidance
The Goods and Service Tax (GST) is an indirect/consumption tax levied on the supply of goods. Currently, GST is divided into 5 tax slabs for collection of tax- 0%, 5%, 12%, 18% and 28%.The Goods & Service Tax came into effect on July 1, 2017 as per the 101st Amendment of the Constitution of India by the Indian Government.
The GST types are determined based on the province in which the goods and/or services are exchanged and transactions made. The types of GST include: • Central Goods & Services Tax (CGST) • State Goods & Services Tax (SGST) • Union Territory GST (UTGST) • Integrated GST (ITGST)