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Budget 2024: Top Demands Include Higher Standard Deduction, Tax Ease

A KPMG India report outlines key expectations for the upcoming Union Budget, focusing on relief for salaried individuals and businesses. It recommends raising the standard deduction for employees to Rs 1 lakh and extending deadlines for filing belated tax returns to aid those with cross-border income. For corporations, it seeks clarity on tax treatment for foreign companies and exemptions from Minimum Alternate Tax in specific sectors. The report also advocates for allowing housing loan interest deductions under the new tax regime to promote home ownership.

Key Points: Budget 2024 Expectations: Standard Deduction, Tax Ease

  • Raise standard deduction to Rs 1 lakh
  • Extend deadlines for belated tax returns
  • Allow housing loan interest deduction in new tax regime
  • Provide MAT exemption for foreign firms
2 min read

Increase in standard deduction, ease of doing biz among top budget expectations

KPMG report outlines key budget expectations: higher standard deduction, extended tax return deadlines, and ease of doing business reforms.

"Considering the significant burden of home loan repayments... it is recommended that the Government allows such interest deduction - KPMG India Report"

New Delhi, Jan 10

The government should consider enhancing standard deduction for salaried employees, allowing more time for belated tax returns and several measures to improve ease of doing business in the upcoming Union Budget, a report has said.

The report from KPMG India said India's top expectations from the budget include a raise in the standard deduction for salaried employees to Rs 1 lakh and extension of timelines for filing revised or belated returns to help taxpayers with cross‑border income reporting obligations, the report said.

"In cases, especially when individuals with cross border investment and income file tax returns their home or host country are not finalised, which may lead to under-reporting and over-reporting of income," the report explained the rationale for allowing more time for revised or belated returns.

The business advisory firm also recommended allowing housing loan interest deductions against salary income, including for self-occupied property.

"Considering the significant burden of home loan repayments and the goal of promoting home ownership, it is recommended that the Government allows such interest deduction on self-occupied property under the new tax regime," the report said.

Further on the corporate tax front, the report sought clear exemption for foreign companies under presumptive tax regimes and urged a minimum alternate tax (MAT) exemption where incidental income accompanies specified business income such as shipping, civil construction or oil exploration.

The current provision creates a challenge when incidental income is earned alongside business income, potentially exposing these foreign companies to MAT, it said.

A clear exemption would help improve India's competitiveness for foreign companies engaged in these businesses in India, according to the firm.

In certain cases, courts have treated redemption premium on debentures as interest. Section 76 of the Income Tax Act, presumes redemption premium on debentures to be short-term capital gains. This creates uncertainty for issuers and investors on the treatment of such income, impacting tax computations and withholding obligations, the report noted.

On the indirect tax front, the report called for allowing provisional refund sanctioning for inverted duty structure cases, which will help expedite refunds, improve liquidity, and reduce delays through a risk-based approach.

- IANS

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Reader Comments

R
Rohit P
The point about home loan interest deduction under the new tax regime is crucial. Many of us chose the new regime for simplicity but lost out on this key benefit. Promoting home ownership should be a priority.
A
Aman W
While I support measures for ease of doing business, I hope the focus remains on the common man. The budget should balance corporate incentives with substantial relief for the middle class, which is the backbone of consumption.
S
Sarah B
The extension for belated returns for those with cross-border income is a sensible recommendation. The compliance burden for NRIs and people working globally is immense. Clarity and time will reduce errors.
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Vikram M
Allowing provisional refunds for inverted duty structures is a big one for manufacturing. It directly improves liquidity for businesses. Hope the FM listens to these practical suggestions from KPMG.
K
Karthik V
With respect, some of these corporate tax clarifications, like on MAT for foreign companies, seem like fine-tuning for big players. The budget's headline should be about putting more money in the hands of Indian consumers to drive growth.

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