ICAI has issued it’s memorandum for the next Budget 2020-21 wherein it has discussed various points which needs to be clarified or worked upon by the government. The finance Ministry every year ask for suggestions from various institutions for their suggestion with regard to the budget. We’ll discuss some of the suggestion’s here:
- The first amendment which the ICAI has asked for is a consequential amendment to reduce the time limit to hold the property under section 54, 54B, 54D and 54F as the term for long term asset has been reduced to 3 years from 2 years.
- It is also suggested to allow fees paid for increase in authorized capital as revenue expenditure in 5 equal installment which is now not allowed if it’s incurred after incorporation.
- Next is to make the definition of business u/s 44AD as exclusive definition rather than a inclusive definition.
- It has been suggested to provide LLP the benefit of presumptive taxation which is not available till now.
- It has also been advised to increase the limit of turnover u/s 44ADA from Rs. 50 lakh to Rs. 1 crore and reduce presumptive income from 50% to around 30%.
- The limit to invest in bonds has been advised to be increased from 6 months to the due date for filing return of income and also the amount of investment.
- The amount of loss that can be carry forwarded in case of house property needs to be increase from 2 lakh to 5 lakh.
- It has been suggested to increase threshold deduction from Rs. 1.5 lakh to 2 lakh and allow investment in PPF to upto 3 lakh from existing 1.5 lakh limit.
- It has been suggested to remove DDT and tax u/s 115BBDA and just tax the dividends in hands of assessee as was there earlier before 1997.
- It has been further advised that if DDT is not removed it must be replaced with TDS and grossing up should be removed.
- It has been suggested to send the reason for reopening along with notice to reopen a case u/s 148, which is not the procedure right now.
There are many more changes suggested by ICAI which you can read below, not all would be taken into account but let’s hope some of them are taken into account while drafting the Budget/ Finance Bill.
[pdf-embedder url=”//www.taxontips.com/wp-content/uploads/2019/12/57650dtc46843_compressed.pdf” title=”Pre budget memorandum ICAI”]
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