Post-Budget Memorandum 2022-23 of Bombay Chamber [Direct Tax]

The Honourable Finance Minister Smt. Nirmala Sitharaman presented a growth oriented Budget on 1 February 2022 for a country seeking to ride over Covid 19 pandemic. The Bombay Chamber deeply appreciates the policy framework laid out in the Budget with a clear focus on capital expenditure with multiplier effect which, we are sure, will put the economy on a firm growth path. From a tax policy perspective, the Bombay Chamber welcomes the bold decision of not increasing tax rates or levying new taxes in the backdrop of Covid 19. The Budget proposals also spell out incentives for foreign investment in IFSC and infrastructure sector, extension of sun-set date for certain incentives in backdrop of Covid 19, reduction of surcharge for long term capital gains & AOPs comprised only of companies and other measures intended to spur investment and improve ‘ease of doing business’.

However, certain direct tax proposals in the Budget have raised concerns amongst the industry members who desire reconsideration or deferral of the proposals and/or better clarity with a view to avoid hardships for the industry and reduce potential for litigation.

On the basis of the responses received from our Members, a Memorandum containing suggestions of Bombay Chamber [Direct Tax] on the issues related to the Finance Bill 2022 is attached for your kind consideration. These include request to refrain from retrospective amendments, more clarity on taxation of virtual digital assets and TDS on business perquisites, relaxing stringent requirements of updated return facility, reconsideration of expanded scope of reassessment, addressing the anomalies in proposed provisions on succession through business reorganisation, rationalisation of taxation of charities and providing carve out for bonafide borrowings from the onerous requirement of explaining ‘source of source’ .

Our representatives would deem it a privilege to participate in the meetings organised by the Department of Revenue for post-budget discussions and provide any further clarifications, if required, with regard to our suggestions.