International taxation and transfer pricing
– There should be clarity on taxation of capital gains arising on transfer of indirect share holding in India.
– The benefit of concessional tax rate of 15% on foreign dividend tax should be extended to individuals and firms as well. Currently this benefit is available only for corporate holdings.
– Safe harbour rules to be simplified to encourage more businesses to adopt the option and eventually reduce frivolous tax litigation.
– Domestic transfer pricing provisions should be strictly restricted to transactions between related parties enjoying different tax positions.
– Concept of corresponding adjustment in transfer pricing should be introduced to eliminate undue hardship of double taxation in the event of transfer pricing adjustments.
– Legislative clarity on taxation of indirect branding expenses and its related attribution would be a welcome initiative to avoid litigation.
The provisions of Buyback distribution should be strictly restricted to foreign investments routed through tax havens. Currently, by making it a blanket levy, there is a serious case of domestic double taxation.
– There should be stringent administrative measures to significantly enhance wealth tax enforcement and collection. Currently our wealth tax collection is around Rs 1000 crores which is abysmally lower than the potential of the levy.
Interest on Housing loans
– Interest paid during pre-construction period should also be made eligible for deduction. In the present scenario, for self occupied properties in large township projects- many assesses practically face the problem of paying interest for 2 to 5 years while staying in a rented property and still not being in a position to claim any tax relief on the pre-construction interest during the periods of payment.