Pre-budget meet: Fin sector seeks stable tax policy on capital gains, sec transactions

The suggestions included widening market access, providing tax incentives, and boosting fund allocations for NBFCs.
Image used for representational purpose only.
Image used for representational purpose only.

NEW DELHI: Financial industry leaders , in the second pre-budget meet held on Thursday, sought for stable and long-term tax policies on capital gains tax, shares transactions, and clarity on GST.

The suggestions included widening market access, providing tax incentives, and boosting fund allocations for NBFCs. Discussions touched on GST implications for loans and service charges, as well as strategies to maintain capital within the country, particularly in relation to GIFT City.

Arun Kohli, MD and country head of Morgan Stanley India, emphasised the importance of stable and long-term tax policies. Experts also shared insights on capital gains tax and taxes related to the purchase and sale of shares. George Alexander Muthoot, MD of Muthoot Group, highlighted the need for widening the market and providing tax incentives to companies.

Raman Agarwal, FIDC director, suggested increasing funds allocation from SIDBI and NABARD to refinance NBFCs, considering the rise in NBFC loans and concerns raised by the RBI regarding excessive bank dependency. NBFCs are seeking clarity on GST for loans and service charges, he said.

Meanwhile, asset management companies discussed issues concerning GIFT City and strategies to retain capital within the country. In an another meeting, Vivek Jalan, Chairman of National Fiscal Affairs and Taxation Committee, Bengal Chamber of Commerce and Industry, suggested that the expenditure on scientific research should be incentivised so that Indian corporate spend more on R&D expenditure to manufacture indigenous products.

To streamline the reconciliation process under income tax, he proposed to link PAN and TAN, akin to the PAN-Aadhaar linkage. He also requested to remove the requirement for payers to issue TDS/TCS certificates and consider prescribing Form 26AS (generated through secure safeguards). He also proposed to cover the cases of excess payment of custom duty, resulting in refund to the importers under faceless e-assessment.

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