The Institute of Chartered Accountants of India (ICAI) has sought tax incentives for entities engaged in green projects that impact the environment positively and entities exclusively engaged in skill development programs.
In a Pre-Budget Memorandum 2024 submitted to the Central Board of Direct Taxes (CBDT), the statutory body for the regulation and development of the profession of Chartered Accountancy in India also proposed that interest income earned by the subscribers of green bonds may be exempt or, in the alternative, be subject to a concessional rate of tax.
The institute said that in line with the government’s campaign to promote the education of the girl child, a separate provision for deduction of expenses relating to the education of girl child both under the default tax regime and alternative tax regime would help. Suggestions relating to the personal taxation regime include the provision of the deduction for mediclaim premiums paid under the default tax regime, regular enhancement of standard deduction, and the option of joint taxation for married couples.
“ICAI has pioneered formulating standards on sustainability reporting, shaping the ESG reporting landscape in the country. In order to enhance green finance and encourage green projects, we have advocated for special incentives to entities undertaking Green Projects and proposed exemption for interest income of subscribers of green bonds issued by such entities,” Ranjeet Kumar Agarwal, President, ICAI, said.
On the business taxation front, the ICAI memorandum proposed alignment of the provisions of tax audit with the presumptive income provisions, further simplification of the presumptive income regime, and an increase in the threshold for computation of allowable remuneration of partners. The Memorandum also contains suggestions for rationalization of the provisions relating to the taxation of charitable trusts. Allowing the filing of updated returns in case of a reduction in losses and permitting the filing of such returns where assessment proceedings are completed are some important suggestions in relation to return filing.
Rationalization of the tax rate under section 115BBE (as well as the surcharge thereon) on deemed income under sections 68 to 69D has been suggested.
The Pre-Budget Memorandum 2024 emphasizes the importance of rationalizing direct tax laws, minimizing litigation, and enhancing tax collection mechanisms, all geared towards fostering a conducive fiscal environment for the year 2024-25.
With around 8.5 lakh students and over 4 lakh members, ICAI is the largest professional accountancy body in the world. It has a wide network of 5 Regional Councils and 175 branches within India and a global presence with 50 overseas Chapters and 31 Representative Offices spanning 81 cities across 47 countries.
The article originally appeared on Fortune India.
