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The <keyword id="6396355" type="ORGANIZATION" weightage="20" keywordseo="nclat">NCLAT</keyword> on Wednesday dismissed the pleas of auditors of debt-ridden IL&amp;FS -- <keyword id="115294" type="COMPANY" weightage="20" keywordseo="Deloitte-Haskins">Deloitte Haskins</keyword> &amp; Sells and <keyword id="50041" type="COMPANY" weightage="20" keywordseo="KPMG">KPMG</keyword> arm BSR &amp; Associates -- along with independent directors challenging their impleadment in the case of alleged fraud at a group firm IFIN. A two-member bench of the NCLAT upheld the directions of the Mumbai bench of the <keyword id="3778499" type="COMPANY" weightage="20" keywordseo="NATIONAL-COMPANY">National Company</keyword> Law Tribunal, saying it can not be termed as "illegal". The NCLT had directed them to implead the auditors and independent directors as party. The NCLT is empowered to pass order to implead them under Section 242 of the Companies Act, 2013 in a petition under Section 241(2) if "it forms opinion that the affairs of the company have been conducted in a manner prejudicial to the public interest", the appellate tribunal further said. "Once such opinion is formed by the Tribunal, it may pass any order as it deem fit and proper,"said the National Company Law Appellate Tribunal (NCLAT) bench headed by Chairperson Justice S J Mukhopadhaya. The case relates to IFIN, a subsidiary of IL&amp;FS. Rejecting the contention of the auditors and others that they cannot be treated as part of the management, which is responsible for managing the affairs of the company and therefore should not be charged as per the said section, the NCLAT said that rules of natural justice are to be followed. "As rules of natural justice are to be followed, if any order is passed against one or other, including investigation, it is always open to the Tribunal to ask such party to be impleaded," the NCLAT said. The MCA had asked the NCLT to freeze the assets of the former auditors in the case, involving alleged fraud in IFIN. The appellate tribunal, however, granted relief to both the auditors and other independent directors by allowing the operation of its earlier interim order passed on July 29, 2019 for two weeks. After the judgment was pronounced by the NCLAT in the open court, a request was made by counsels, representing accounting firms and other independent directors, to allow the interim order passed by it on July 29, 2019 for two weeks, which was accepted by the appellate tribunal. "We allow the prayer and continue the interim order passed on 29th July, 2019 for another two weeks," the bench said. On July 29, the NCLAT stayed the order of the Mumbai bench of the National Company Law Tribunal (NCLT) to implead the auditors and independent directors of IL&amp;FS. Earlier on July 23, the NCLT had allowed the plea of the <keyword id="6376435" type="COMPANY" weightage="20" keywordseo="ministry-of-corporate-affairs">Ministry of Corporate Affairs</keyword> (MCA) to implead the auditors and independent directors of IFIN. Moreover, visualsing the possible impact of IL&amp;FS crisis on the Indian economy, the NCLAT in its 72-page-long order said that various acts "prejudicial to public interest" have been highlighted, which has cascading impact on various sectors of economy and even the <keyword id="144110" type="COMPANY" weightage="20" keywordseo="Department-of-Economic-Affairs">Department of Economic Affairs</keyword> -- which is responsible for the financial stability of the country -- too has raised "Red Signals" of the likely collapse of 'IL&amp;FS' in its confidential note dated September 30, 2018. "In the circumstances, before passing any appropriate order in public interest and to save the economy of the Country from collapse, if the Tribunal is of the opinion that it requires to give appropriate hearing to the concerned parties, including those who audited 'IL&amp;FS' and/ or those who have managed or were concerned with 'IL&amp;FS' or its Group Companies, it cannot be held to be illegal. "We find no merit in these appeals. They are accordingly, dismissed," the NCLAT said. The central government had submitted that the act of fraud perpetuated is on account of "mis-representation and falsehoods about the financial state of affairs" of the concerned company, which has jeopardized the financial health apart from causing serious damage and financial loss to various stakeholders. However, the tribuanl said that as the matter is still pending before the NCLT, it is "not inclined to express any opinion whether the allegations made against one or other require further investigation and the order what is required to be passed in public interest". While commenting on the development, Deloite India spokesperson said: "We will review the written order before determining our further course of action, which may include an appeal". Auditors cannot be treated as part of the management which is responsible for managing the affairs of the company and therefore should not be charged, the spokesperson said. "We will continue to present and protect its position, supported by the facts, to the relevant authorities. The firm remains committed to high standards of audit quality and ethical conduct in its professional practice," he added. There was no immediate comment from KPMG.

In the IL&FS scam, auditors will not be left off the hook for their role

In the case of <keyword id="622298" type="ORGANIZATION" weightage="20" keywordseo="Nestle-India-Ltd">Nestle India Ltd</keyword> Vs Commissioner of Central Excise, Mumbai of 1999, it was ruled that KitKat is a biscuit and not a chocolate that is taxed high. And now with the government’s decision to roll out GST from July onwards, many FMCG companies are getting haunted by the past ghosts. 
 
Just like KitKat is a biscuit, vicks is a medicine, Parachute coconut oil is edible oil. The ambiguity is lot of our everyday necessities is making it difficult for the government to fix the tax. 
 "In the past, several tax officers had challenged some of the product categorisations, including those in the retail segment, but lost out in court or at appellate level," one of the persons in the know told <keyword id="6405564" type="COMPANY" weightage="20" keywordseo="The-Times-Of-India">The Times of India</keyword>. "Now we have a chance to go ahead with specifying the products in a way based on the old cases so that similar situations don't arise." 
 "The GST rates for each and every item are not yet decided as the government is categorising products and what rates can be applied on each category of goods," MS <keyword id="9128" type="PERSON" weightage="20" keywordseo="Mani">Mani</keyword>, senior director, <keyword id="514770" type="COMPANY" weightage="20" keywordseo="Deloitte-Haskins-Sells">Deloitte Haskins &amp; Sells</keyword> told TOI. "There is a chance that some of the old issues raised by the tax department regarding category of certain goods may come back to haunt some companies or products as GST is a new law and can redefine rates and what goods would fall under its preview."

KitKat is a biscuit and Parachute Coconut oil is edible! That's the new topic for GST debate

So as to make housing affordable and low cost, the government might change the definition of the infrastructure sector upcoming <a href="http://www.businessinsider.in/searchresult.cms?query=Budget+2017&amp;sortorder=effectivedate">Budget 2017</a>. This move will reduce costs for developers and attract investors. 
 
The proposal came forward after a month of <a href="http://www.businessinsider.in/searchresult.cms?query=Prime+Minister+Narendra+Modi&amp;sortorder=effectivedate">Prime Minister Narendra Modi</a>’s announcement of concessions on interest rates for low-cost housing loans under the <keyword id="3105886" type="UNKNOWN" weightage="20" keywordseo="Pradhan-Mantri-Aawas-Yojana">Pradhan Mantri Aawas Yojana</keyword>. 
 
"If we want housing for all by 2020, re-categorising affordable housing as infrastructure is essential. The government had sought feedback about this about a week ago. I see this happening in the upcoming budget," a person familiar with the development told ET. 
 
The government has been trying really hard to push Modi's pet project of providing about 20 million houses across India by 2020. It has reached out to senior finance ministry officials and the <a href="http://www.businessinsider.in/searchresult.cms?query=Reserve+Bank+of+India&amp;sortorder=effectivedate">Reserve Bank of India</a> for feedback on the proposed change and how to prevent it from being misused. 
 
"The important thing here would be to define affordable housing or low-cost housing. And these projects will have to be insulated in a way that no one is able to take money out without completion of the project," another person aware of the development told ET. 
 
The real estate sector has been under a constant stress as they have borrowed funds at a higher cost. Also the <a href="http://www.businessinsider.in/searchresult.cms?query=demonetisation&amp;sortorder=effectivedate">demonetisation</a> move has led to a steep fall in real estate sales. 
 "If affordable housing is given infrastructure status, it would lower the borrowing cost for the developers. Also, regulations should be simplified to directly borrow foreign debt, which can cost around 4-5% on dollar return," <keyword id="291573" type="PERSON" weightage="20" keywordseo="Hemal-Mehta">Hemal Mehta</keyword>, a partner at <keyword id="4070183" type="UNKNOWN" weightage="20" keywordseo="deloitte-haskins-sell">Deloitte Haskins &amp; Sell</keyword>, told ET. 
 
According to Industry experts, while it may appear to be a small change, categorising low-cost housing as infrastructure could have far-reaching results. 
 "Real estate industry has been asking for the infrastructure status for affordable housing for last three years, but this time it is only logical that it could go ahead. This is mainly because the prime minister has announced the new scheme and infrastructure status will help reduce the borrowing cost and help accelerate growth," <keyword id="3267520" type="UNKNOWN" weightage="20" keywordseo="Jeenendra-Bhandari">Jeenendra Bhandari</keyword>, partner at MGB and Co, an audit and tax firm, told ET.

Budget 2017 is going to have huge respite for real estate sector. Here’s how

Crashing data tariffs, free voice calls, disruptive entry of <keyword id="6354504" type="UNKNOWN" weightage="100" keywordseo="Reliance-Jio">Reliance Jio</keyword> and a no-holds-barred turf war to safeguard Rs 9 lakh crore worth of cumulative investments have sthe tone for an action-packed 2017 for the telecom sector, which also had to grapple with the thorny issue of call drops this year, as per an agency report 
 
 
If anything, the high-voltage narrative of 2016 has left mobile subscribers craving for more in the coming year both in terms of tariffs which have touched new lows, and technology. 4G has boosted mobile speeds to levels never experienced before by the data-hungry Indians. 
 "About Rs 9,27,000 crores have been invested so far by telecom service providers (TSPs) in building world class telecom infrastructure," industry body COAI's Director General <keyword id="6421510" type="PERSON" weightage="20" keywordseo="Rajan-S-Mathews">Rajan S Mathews</keyword> said. 
 Incumbent telecom operators in representations throughout the year have shared how their revenues have taken a hit on various accounts ranging from <keyword id="6356988" type="PERSON" weightage="20" keywordseo="TRAI">Trai</keyword>'s decision to bar differential tariff platforms like <keyword id="6354576" type="CITY" weightage="20" keywordseo="Facebook">Facebook</keyword>'s Free Basics, <keyword id="15491" type="COMPANY" weightage="100" keywordseo="Airtel">Airtel</keyword> Zero, to Reliance Jio unveiling free services. 
 <keyword id="2649527" type="UNKNOWN" weightage="20" keywordseo="Deloitte-Haskins-Sells-LLP">Deloitte Haskins &amp; Sells LLP</keyword> Partner <keyword id="177478" type="PERSON" weightage="20" keywordseo="Hemant-Joshi">Hemant Joshi</keyword> said however that the prohibition on discriminatory tariffs has played a significant role to make data services affordable and accessible by everyone and is one of the important factors behind the rising adoption of data services in India. 
 
The telecom regulator's latest recommendation to allow third party platforms to provide free data without bias towards a particular telecom operator or internet content is likely to rekindle the debate on net neutrality in 2017. 
 Looking back, the going year started-off with a setback- of-sorts for consumers when the <keyword id="6354977" type="ORGANIZATION" weightage="20" keywordseo="Supreme-Court">Supreme Court</keyword> quashed penalty provision for call drops, prompting the regulator to seek more powers to penalise errant telecom operators. 
 The <keyword id="150664" type="ORGANIZATION" weightage="20" keywordseo="telecom-department">Telecom Department</keyword> and regulator launched a combined offensive -- in form of review meetings and drive tests - to ensure that service quality issues remain at the forefront all through the year. 
 
To address the problem of call drops, operators have added about 3.51 lakh BTSes in last 12 months, according to Mathews. 
 
Besides this, Trai continues to work on review of service quality norms, ombudsman model, and interconnection all of which are expected to take shape in 2017. 
 There was never a dull moment for the telecom sector this year, and the market pulsated with action thanks to improved affordability, falling handset prices and operator investments in improving network coverage (helped by policies like <keyword id="223163" type="ENTERTAINMENT" weightage="20" keywordseo="Right-of-way">Right of Way</keyword> and spectrum sale). 
 
The year saw India overtaking US to become the world's second-largest smartphone market with an installed base of 275 million devices. It has also predicted that 4G connections will grow to 280 million by 2020. 
 
According to global mobile industry body GSMA, India will add 330 million unique subscribers by 2020 (from 616 million unique users as of June 2016). In addition, the industry is set to invest heavily, with operator capex growing to USD 34 billion between 2016 and 2020, says GSMA. 
 
If anything, demonetisation and digital push -- resulting in increased adoption of mobile wallets -- will put the market on a turbo charge, say industry watchers. 
 Already, the average Indian is consuming data -- movies, gaming, connecting on social media -- like never before, in the aftermath of the industry price war triggered by the entry of India's richest businessman <keyword id="3820" type="PERSON" weightage="20" keywordseo="Mukesh-Ambani">Mukesh Ambani</keyword> in the telecom industry. 
 
Jio, which launched full-fledged 4G services in September, has promised free voice calls for life along with rock-bottom data prices, once its ongoing free services come to an end on March 31, 2017. 
 The market's appetite for data can be gauged from the fact that <keyword id="10924" type="PERSON" weightage="20" keywordseo="Ambani">Ambani</keyword> had set a target of 100 million customers in the "shortest time possible" for Reliance Jio, but the new venture notched 52 million customers in just 83 days, growing faster than Facebook and WhatsApp.

Here’s
what Reliance Jio and Airtel would be offering in 2017

The <keyword id="26362" type="ORGANIZATION" weightage="20" keywordseo="Government">government</keyword> is going to try and cushion the impact that will be created by <a href="http://www.businessinsider.in/searchresult.cms?query=goods+and+service+tax&amp;sortorder=effectivedate">goods and service tax</a> (<keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword>) on services in case of an increase in the levy after the implementation of the tax reform measure. 
 
A <a href="http://www.businessinsider.in/searchresult.cms?query=service+tax&amp;sortorder=effectivedate">service tax</a> of 14.5% is currently imposed by the government. However, GST rate is expected to be higher with states such as <a href="http://www.businessinsider.in/searchresult.cms?query=Kerala&amp;sortorder=effectivedate">Kerala</a> looking at a rate of 20%, so they don’t lose revenue in the new tax regime. 
 A rate of somewhere around 18% had been recommended by a committee under <keyword id="86557" type="POSITION" weightage="20" keywordseo="Chief-economic-adviser">chief economic adviser</keyword> <a href="http://www.businessinsider.in/searchresult.cms?query=Arvind+Subramanian&amp;sortorder=effectivedate">Arvind Subramanian</a>. “The GST council will look into various options to reduce the impact on several sectors. We are working on various parameters,” a senior finance ministry official, who did not wish to be identified, told ET. 
 "We will give our inputs and the various scenarios under GST. It is a political call which has to be taken," the official further added. According to the sources, in the run up to the general election in 2019, the government will take any measure to shield the voters/consumers in case of an increase in the <keyword id="6355686" type="COMPANY" weightage="20" keywordseo="Service-tax">service tax</keyword> rate. 
 The sources however said, the levy on <keyword id="6371025" type="COMPANY" weightage="20" keywordseo="Restaurant">restaurant</keyword> bill is to be reviewed as the higher abatement for the service is due to the argument that several food products face excise duty, which is factored in currently .With these food products coming under GST along with the service provided by restaurants, the burden on the consumer may not rise significantly. 
 Also efforts are to be made so as to minimize the impact created by the GST on the under <keyword id="34617" type="COMPANY" weightage="20" keywordseo="construction">construction</keyword> houses and the government may provide for abatement for land and other commodities used for construction. The problem however, arises as no abatement is allowed in lieu of land and other commodities such as steel, cement and sand used for the construction. 
 In contrast to this, a cushion may not be provided to lessen the impact for services like <keyword id="6354776" type="COMPANY" weightage="20" keywordseo="Telecom">telecom</keyword>, which will be impacting your mobile bill. “Abatement may continue for some <keyword id="60468" type="ORGANIZATION" weightage="20" keywordseo="Consumers">consumers</keyword> facing services where it is impossible to segregate value of services and goods such as restaurants where combined impact of the GST rate is much higher than present tax rate under <a href="http://www.businessinsider.in/searchresult.cms?query=VAT&amp;sortorder=effectivedate">VAT</a> and service tax," M S Mani, senior director at consultancy firm <keyword id="3656732" type="UNKNOWN" weightage="20" keywordseo="Delloite-Deloitte-Haskins-Sells-LLP">Delloite Deloitte Haskins &amp; Sells LLP</keyword> told ET. 
(image:Reuters)

Modi government to cushion the impact of hike in
service tax, post GST

New Delhi, Feb 16 () Auditing major Deloitte Haskins &amp; Sells and its network firms in India will no longer offer non-audit services to public interest entities that they audit in the country, the company said on Sunday.It said that this voluntary action is in the spirit of self-regulation and extends beyond non-audit services permissible under prevailing rules and regulations in India."We believe this would increase the public's confidence in auditor independence and quality and will remove ambiguity in a public and business environment that demands greater clarity about our services," a spokesperson from Deloitte said. RSN RSN BALBAL

Deloitte stops non-audit services to public interest entities in India

New Delhi, Mar 4 () The National Company Law Appellate Tribunal (NCLAT) on Wednesday dismissed the pleas of debt-ridden IL&amp;FS auditors -- Deloitte Haskins &amp; Sells and KPMG arm BSR &amp; Associates -- challenging their impleadment in the case involving alleged fraud in IFIN, a subsidiary of IL&amp;FS. A two-member NCLAT bench led by Chairman Justice S J Mukhopadhaya dismissed the pleas of auditors and other independent directors. The appellate tribunal, however, granted a relief to both auditors and other independent directors by allowing the operation of its earlier interim order passed on July 29, 2019 for two weeks. On July 29, the NCLAT stayed the order of the Mumbai bench of the National Company Law Tribunal (NCLT) to implead the auditors and the independent directors of IL&amp;FS. Earlier on July 23, the NCLT had allowed the plea of the Ministry of Corporate Affairs (MCA) to implead the auditors and independent directors of IFIN. "On the request of the counsel, we allow (that) interim order dated July 29 would continue till another two weeks," the bench said. The MCA had asked the NCLT to freeze the assets of the former auditors in the case involving alleged fraud in IFIN. While, commenting on the development, Delloite India spokesperson said: "We will review the written order before determining our further course of action, which may include an appeal." Auditors cannot be treated as part of the management which is responsible for managing the affairs of the company and therefore should not be charged, the spokesperson said. "We will continue to present and protect its position, supported by the facts, to the relevant authorities. The firm remains committed to high standards of audit quality and ethical conduct in its professional practice," he added. KRH MKJ

NCLAT dismisses Deloitte, KPMG pleas against impleadment in IL&FS matter

Under the wrong impression that disputes related to <keyword id="115548" type="UNKNOWN" weightage="80" keywordseo="minimum-alternate-tax">minimum alternate tax</keyword> (MAT) were on hold for some time, overseas investors got an unexpected jolt last week when the income-tax department issued notices to foreign portfolio investors (FPIs). They were informed that the hearing of MAT disputes would start soon. 
 
The Dispute Resolution Panel (DRP) of the income-tax department sent notices which said the investors would have to submit any additional material in this regard within the next nine days. 
 The investors were relaxed after <keyword id="6355261" type="POSITION" weightage="60" keywordseo="Finance-minister">Finance Minister</keyword> <keyword id="42575" type="PERSON" weightage="80" keywordseo="Arun-Jaitley">Arun Jaitley</keyword>’s reassurance about the retrospective levy of MAT. Further, they thought the hearing is on hold until a newly constituted government panel reported on the matter or the <keyword id="6354977" type="ORGANIZATION" weightage="80" keywordseo="Supreme-Court">Supreme Court</keyword> gave its ruling on a MAT case. 
 
The government last week formed a three-member committee under retired judge AP Shah to see whether MAT could be levied on FPIs. The committee is expected to submit its report in three months. Besides this, a case between the revenue authorities and Castleton (an FPI) is currently pending in the Supreme Court. 
 "The DRP has sent notices to FPIs asking them to immediately submit additional details, which they had not submitted before the <keyword id="147935" type="POSITION" weightage="60" keywordseo="assessing-officer">assessing officer</keyword> or additional grounds regarding their ongoing appeals," Rajesh H Gandhi, partner, tax, <keyword id="6358918" type="PERSON" weightage="80" keywordseo="Deloitte">Deloitte</keyword> Haskins &amp; Sells told the Economic Times. 
 
The dispute, which has unnerved foreign investors, began when the income-tax department started sending notices to FPIs about six months ago asking them to pay MAT for FY12. 
 
Many tax experts say MAT cannot be applied to an entity that doesn't have a so-called permanent establishment in the country. By the last week of March, several FPIs had been served with notices asking them to pay the tax. 
 The government intervened after many FPIs lashed out at what they described as the uncertainty plaguing India's tax administration. The government has been at pains to change the image of India as being aggressive on <keyword id="6383566" type="PERSON" weightage="80" keywordseo="Taxation">taxation</keyword> in order to drum up investment. 
 
The cases filed in the high court have not been heard as yet, presumably because it would ideally like to wait for the committee's report or the Supreme Court judgment, experts said. 
 
(Image: Indiatimes)

On Modi Year 1, bad news for foreign investors!

Capital markets regulator SEBI sent notices last week to four entities asking them to pay Rs 4.56 crore within 15 days in <keyword id="46994" type="General" weightage="100" keywordseo="fortis-healthcare" source="Orion">Fortis Healthcare</keyword>'s case of fund diversion and misrepresentations to conceal the fraud. In addition, the regulator warned of attachment of assets and accounts if they fail to make the payment within the stipulated time. The four entities that received notices are -- Fortis Global Healthcare, RHC Finance, <keyword id="6984621" type="General" weightage="50" keywordseo="shimal-healthcare" source="Orion">Shimal Healthcare</keyword> and ANR Securities. The demand notices came after the entities failed to pay the fine imposed on them by the <keyword id="6355630" type="General" weightage="50" keywordseo="securities-and-exchange-board-of-india" source="Orion">Securities and Exchange Board of India</keyword> (SEBI) in May 2020. In four fresh notices dated June 9, SEBI directed them to pay Rs 4.56 crore, which includes interest and recovery cost, within 15 days. In the event of non-payment of dues, the regulator will recover the amount by attaching and selling their moveable and immovable properties. Besides, they will face attachment of their bank accounts. Also, the regulator takes the route of arrest and detention in prison to recover the amount. In May 2022, SEBI imposed penalties totalling Rs 38.75 crore on 32 entities, including these four entities in the case related to the diversion of funds of <keyword id="161042" type="General" weightage="50" keywordseo="fortis-healthcare-ltd" source="Orion">Fortis Healthcare Ltd</keyword> (<keyword id="5209318" type="General" weightage="80" keywordseo="fhl" source="Orion">FHL</keyword>) and misrepresentations to conceal the fraud. It levied a fine of Rs 1 crore each on the four entities. The matter goes back to 2018 when a media report came out that the promoters of the listed FHL had allegedly taken massive funds out of the listed company. It also pointed out that Deloitte Haskins &amp; Sells LLP, the statutory auditor of FHL, had refused to sign on the company's second-quarter results until the funds were accounted for. Subsequently, the regulator initiated an investigation into the matter to examine possible violations of the provisions of the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices). In its probe, SEBI found that a systematic scheme of fraud was devised by the erstwhile promoters of FHL to funnel the resources of a listed company behind the facade of investment through Inter-Corporate Deposits (ICDs) or short-term loans to various intermediate entities for the benefit of RHC Holding, an entity which was indirectly owned and directly controlled by the erstwhile promoters. The funds aggregating to Rs 397 crore were diverted from FHL to RHC Holding, through a wholly-owned subsidiary of FHL -- Fortis Hospitals Ltd. The funds were allegedly routed through a network of entities. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/sustainability/news/61-of-young-adults-in-india-likely-to-smoke-e-cigarettes-in-the-future-most-believe-they-are-non-addictive-study/articleshow/100989858.cms">61% of young adults in India likely to smoke e-cigarettes in the future, most believe they are non-addictive: study</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/markets/news/here-are-nifty-50s-top-gainers-in-the-last-six-months/slidelist/100990324.cms">Here are Nifty 50’s top gainers in the last six months</a>

SEBI issues demand notices to 4 entities in Fortis Healthcare fund diversion case

By <keyword id="13186635" type="General" weightage="20" keywordseo="shripal-lakdawala" source="Orion">Shripal Lakdawala</keyword>, <keyword id="13186636" type="General" weightage="20" keywordseo="jatan-shah" source="Orion">Jatan Shah</keyword> and Aashni Shah Even after 6 years of the government providing an ‘in-principle’ approval for strategic disinvestments of 36 of its public sector undertakings (‘PSUs’), the affairs remain in a torpid state. The proposal for such disinvestment was made to ensure reduction of financial burden on the government, elevate the use of technology and thus expand the overall business of the PSUs. However, only 8 out of 36 PSUs have successfully completed their disinvestment procedures and leveraged on the participation of private players. A large chunk of PSUs are still either in the process or haven’t even initiated the process of disinvestment. The ministry of finance, government of India, announced the policy of strategic disinvestment on 1 February 2021 to fulfil the government’s commitment under the Aatmanirbhar Bharat package. Through this policy, the government aims to sell a substantial portion of its stake in the PSUs and use the proceeds to finance various social sector and development programmes. In cases where there is a sale of the entire or even majority of the stake in PSUs, the decision-making power and the control of the companies will shift to a private player. Majority of the PSUs for which strategic disinvestment is proposed are loss making companies i.e., these companies have historically carried forward tax business losses, which are allowed to be carried forward for a period of 8 years under the Income-tax Act, 1961 (‘the Act’). Any potential buyer of these PSUs would want to utilise such losses and set it off against any future income generated by the company. Such losses play a crucial role in determining the value for such loss-making companies. <cmsannotation type="cmsannotation" annotationid="Current scenario" comment="subhead" text="Current scenario">Current scenario</cmsannotation> Currently, section 79 of the Act provides that in case of certain companies, the existing business losses shall lapse on account of a change in shareholding by more than 49%. Accordingly, if the government proposes to sell a stake in PSUs which are not listed or are not held by any listed entity and are not acquired by a listed entity, then in such a scenario, changes in shareholding by more than 49% will lead to a lapse of the existing tax business losses of the PSUs. <cmsannotation type="cmsannotation" annotationid="Proposed amendment" comment="subhead" text="Proposed amendment">Proposed amendment</cmsannotation> In order to facilitate the disinvestment of the PSUs, Budget 2022 proposes to exempt the erstwhile PSUs (i.e., the PSUs in which strategic disinvestment is made by the government), from the provisions of section 79, subject to the condition that the ultimate holding company of the erstwhile PSUs after the completion of strategic disinvestment, continues to hold, directly or indirectly through its subsidiaries, at least 51% of the voting power of such company in aggregate. <cmsannotation type="cmsannotation" annotationid="Is this enough to get the wheels rolling?" comment="subhead" text="Is this enough to get the wheels rolling?">Is this enough to get the wheels rolling?</cmsannotation> In Union Budget 2021, a similar relief was granted for amalgamation of PSUs. Further, clarificatory notification in this regard was issued by the Central Board of Direct Taxes ('CBDT') in September 2021, which is now being formalised by proposing an amendment under the relevant provisions of the act. The previous amendment coupled with the proposed amendment, ensures that there is no lapse on account of carried forward tax losses. While this amendment provides a major relief to the loss-making PSUs which are proposed to be acquired by private sector undertakings, there are a few other requests as well from the industry, to make acquisitions of PSUs lucrative from a tax perspective. Exemption of TDS [tax deducted at source] and TCS [tax collected at source] on such transactions, exemption from obtaining ‘no-objection’ certificates from the tax department, exemption on capital gains on sale of PSUs’ shares and deemed gift taxation on acquisition at a lower valuation, are the few requests from the industry. While there were several expectations from this Budget, only one has been addressed. The proposal in Finance Bill 2022 is a welcome move not only for PSUs which are in the process of disinvestment, but will also speed up upcoming disinvestments. Shripal Lakdawala is Partner, Deloitte India; Jatan Shah is Senior Manager with Deloitte Haskins and Sells LLP; and Aashni Shah is Deputy Manager with Deloitte Haskins and Sells LLP

OPINION: Indian government is still oiling the wheels for disinvestment of PSUs

<ul><li>The <keyword id="6358021" type="General" weightage="100" keywordseo="budget" source="Orion">Budget</keyword> aims to address the concerns raised on the new tax regime since it has not taken off as expected. </li><li>The limits under sections 80C and 80D of the Act have remained constant; they were widely expected to be increased but this has not happened. </li><li>The proposals made in Budget 2023 are welcome and expected to improve overall growth and development. </li></ul>The Economic Survey of 2022-23 expects the Indian economy to grow at 7% for the year ending March 2023, with the country also widely projected to be the fastest growing economy in FY23. At a time when the global economy is grappling with recessionary pressures, this status is a boon. In light of the above and considering that tax rates, deduction and exemption limits, have relatively remained unchanged for some time now, the expectations of individual taxpayers from the <keyword id="6360189" type="General" weightage="50" keywordseo="union-budget" source="Orion">Union Budget</keyword> were quite high. Finance Minister <keyword id="129243" type="General" weightage="50" keywordseo="nirmala-sitharaman" source="Orion">Nirmala Sitharaman</keyword> proposed to introduce five major amendments to tax regulations, impacting individual taxation. It is important to note that all these changes, except that relating to leave encashment, apply only to the new tax regime. <cmsannotation type="cmsannotation" annotationid="The changes are mentioned below:" comment="subhead" text="The changes are mentioned below:">The changes are mentioned below:</cmsannotation> <cmsannotation type="cmsannotation" annotationid="Rebate under section 87A:" comment="subhead2" text="Rebate under section 87A:">Rebate under section 87A:</cmsannotation> At present, for individuals with total income up to ₹5 lakh per annum, there is no tax payable. As per the Budget This limit has now been raised to ₹7 lakh per annum. With this, individuals having total income up to ₹7 lakh per annum, will not be required to pay any taxes. <cmsannotation type="cmsannotation" annotationid="Personal Taxation Rates:" comment="subhead2" text="Personal Taxation Rates:">Personal Taxation Rates:</cmsannotation> The personal tax slabs under the new tax regime have now been reduced to five (as against six currently). The new tax slabs along with the rates are as follows: <table style="border-width: initial; border-style: none;"></colgroup><tbody><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">Income levels </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">Tax Rate </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">Up to 3 Lakh </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">Nil </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">Rs 3 Lakh to Rs 6 Lakh </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">5% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">Rs 6 Lakh to Rs 9 Lakh </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">10% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">Rs 9 Lakh to Rs 12 Lakh </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">15% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">Rs 12 Lakh to Rs 15 Lakh </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">20% </td></tr><tr><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">Over 15 Lakh </td><td style="border-left:solid #000000 0.5pt;border-right:solid #000000 0.5pt;border-bottom:solid #000000 0.5pt;border-top:solid #000000 0.5pt;vertical-align:top;padding:0pt 5.4pt 0pt 5.4pt;overflow:hidden;overflow-wrap:break-word;">30% </td></tr></tbody></table> With the above change, individuals with an income level of ₹15 lakh will get a tax benefit of ₹37,500, as compared to the previous slabs and rates before considering the impact of standard deduction. <cmsannotation type="cmsannotation" annotationid="Benefit of Standard deduction:" comment="subhead2" text="Benefit of Standard deduction:">Benefit of Standard deduction:</cmsannotation> Salaried individuals and pensioners (including family pensioners) will be eligible for standard deduction of ₹50,000, under the new tax regime aligning with the old regime. Currently, standard deduction cannot be claimed under the new tax regime. <cmsannotation type="cmsannotation" annotationid="Reduction in Surcharge rate:" comment="subhead2" text="Reduction in Surcharge rate:">Reduction in Surcharge rate:</cmsannotation> With India having one of the highest maximum tax rates of 42.74%, it is proposed to reduce the top surcharge rate from 37% to 25%, for income above ₹5 crore, effectively reducing the maximum tax and surcharge rates to 39% and 25% respectively. <cmsannotation type="cmsannotation" annotationid="Increase in leave encashment exemption limit:" comment="subhead2" text="Increase in leave encashment exemption limit:">Increase in leave encashment exemption limit:</cmsannotation> The amount of leave encashment received that can be claimed as exempt, has been proposed to be increased from ₹3 lakh to ₹25 lakh for non-government employees citing significant increase in basic salary levels. Apart from the above key amendments, the finance minister also highlighted the new generation income tax return forms that would further simplify the compliance process. Budget 2023 proposes capping the deduction under sections 54 and 54F against long-term capital gains to ₹10 crore, besides taxing the maturity proceeds received from life insurance policies during the life of the individual, where the total premium per annum for new policies after April 1, 2023, is over ₹5 lakh. <cmsannotation type="cmsannotation" annotationid="Concluding remarks" comment="subhead" text="Concluding remarks">Concluding remarks</cmsannotation> Has Budget 2023 really met the expectations of the common man? To some extent yes. The Budget aims to address the concerns raised on the new tax regime since it has not taken off as expected. It has also been specified by the finance minister that effective April 1, 2023, the new tax regime will be the default tax regime though individuals will still have the option to continue with the old tax regime, if beneficial. While the Budget would be hugely appreciated for its hits, there are few expectations that have remained so from an individual taxation perspective. For example, the limits under sections 80C and 80D of the Act have remained constant; they were widely expected to be increased but this has not happened. Further, with the world moving towards remote working, it was important to back this new normal with related tax reliefs to make it a success. Nevertheless, the proposals made in Budget 2023 are welcome and expected to improve overall growth and development, specifically with the increase in budget for infrastructure. (<keyword id="16331073" type="General" weightage="50" keywordseo="radhika-viswanathan" source="Orion">Radhika Viswanathan</keyword> is the executive director and <keyword id="16331074" type="General" weightage="50" keywordseo="vinit-turakhia" source="Orion">Vinit Turakhia</keyword>, senior manager at Deloitte Haskins &amp; Sells LLP India.)

Union Budget 2023: A look at personal tax proposals

<ul><li>Section 80JJAA of the Income Tax Act gives deduction for three years to employers for hiring new people.</li><li>The current limit of this provision is ₹300,000 a year that effectively means that the compensation of these people should be less than ₹25,000.</li><li>If the limit is increased, it could help in boosting the salaries of and the number of jobs for gig workers.</li></ul>One of the major concerns raised by the gig workers — such as <keyword id="4235145" type="General" weightage="20" keywordseo="delivery-partners" source="Orion">delivery partners</keyword>, drivers and more — who work for companies like Zomato, Swiggy, BigBasket and Blinkit (Grofers), is <a href="https://www.businessinsider.in/business/startups/news/bigbasket-flipkart-and-urban-company-may-have-paid-fair-wages-but-it-wasnt-enough-to-earn-a-living/articleshow/88946309.cms">the lack of decent compensation</a>. But what if we were to tell you that if an existing provision of the Income Tax Act is clarified and amended, it could raise salaries for the gig workers. Under Section 80JJAA provision of the Indian Income Tax Act, companies can get a tax deduction for hiring new people. If a company’s workforce increased by 50, the salary paid to these employees would make the company eligible for an additional deduction of 30% for the next three financial years, Hemal Zobalia, Partner at Deloitte Haskins &amp; Sells LLP explains. For example, if the company is paying ₹1000 annually to each of these 50 employees, it will get ₹300 as tax deduction for each of them for each of the next three years. Essentially, 90% of the first year’s salary, for each of the new employees, will be deducted from the company’s taxable profit. The goal of this provision is to create more permanent employment for those who are “low-skilled”, according to Jimit Devani, a partner at Deloitte Haskins &amp; Sells. The provision is applicable for employees whose salaries are ₹25,000 per month or less.Increasing the salary limit to ₹35,000-₹40,000 may push more companies to hire permanent employees instead of contractual ones. Meanwhile, Zobalia is of the belief that this would also help in further increasing their payout and salaries. But there is a bigger challenge here. This is not a widely availed incentive by the companies for several reasons. First, companies prefer to hire people on contract and keep them on a third party’s payroll. Such companies cannot avail tax benefit under the 88JJAA provision. Bringing people on to the payroll makes them eligible for other benefits like pension, insurance, and severance to name a few, Devani said. The third parties, however, do avail these tax benefits for employees that have been on their payroll for at least eight months, Devani added. The second issue with this provision is that the benefit is available only on the net addition of employees. Say, a company has a total of 10 employees. Five of them quit the company in a year, and six more are hired in the same year. While the company has six new employees, the net addition to the workforce is only one. And, so, the tax rebate is available only for one additional employee, and not all six. Improving this provision under the income tax law may go a long way in creating sustainable employment for people with less-valued skills, across a range of industries including the gig economy of which the likes of Zomato, Swiggy, Amazon and Flipkart are part of. The current state of salaries in the gig economy As per <a href="https://www.businessinsider.in/business/startups/news/urban-company-ola-uber-are-not-the-best-places-for-gig-workers/articleshow/88561764.cms">Fairwork India report of 2021</a>, most newage digital platforms — including Zomato, Swiggy, Uber, Dunzo, PharmEasy and Ola — do not offer fair wages to the contractual workers associated with them. Even though companies like Flipkart, Urban Company and BigBasket pay higher and better, it still may not be enough to make local living wage after costs, the report adds. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;" class="redcator-table-advance"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Avg income range, including cost </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Flipkart </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹14,500-₹25,000 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Urban Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹30,000* </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">BigBasket </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹18,000-₹24,000 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Zomato </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹20,000-₹30,000 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Swiggy </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹10,000-₹15,000 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table>Note: Urban Company’s average salary excludes cost Source: Urban Company’s latest report, Apna.co It is important to note that there has been a further reduction in the payout for delivery executives due to decrease in rate cards and incentives, along with increased input costs of petrol and platform commissions. This has made matters worse for the Indian gig workers like delivery partners and drivers, the Fairwork report adds. Fairwork rates digital platforms on their treatment of gig workers who work for them. SEE ALSO <a class="tout-title-link" href="https://www.businessinsider.in/budget/news/budget-2022-why-income-tax-slabs-may-not-change-this-year/articleshow/89179572.cms">Budget expectations 2022: Here’s why income tax slabs may not change this year</a> <a href="https://www.businessinsider.in/budget/news/the-indian-government-has-spent-less-than-half-the-money-it-had-budgeted-for-capital-investments-so-far/articleshow/88852518.cms">The Indian government has spent less than half the money it had budgeted for capital investments, so far</a> <a href="https://www.businessinsider.in/budget/news/budget-2022-expectation-in-higher-standard-deduction-tax-slabs-and-covid-insurance/slidelist/88891751.cms">From higher standard deduction and change in tax slabs to clarity on Covid insurance, here’s what tax experts want from Budget 2022</a>

There’s a way government can prod Zomato, Swiggy, Uber and Ola to increase salaries of delivery partners and drivers

<ul><li>In order to provide a breather to aam aadmi, policy makers could look at increasing the threshold limit for the highest tax rate from ₹10 lakh to ₹20 lakh.</li><li>Cost of education rising rapidly, it is pertinent that the said deduction is branched off as a separate deduction similar to medical insurance. </li><li>The government may also look at announcing certain guidance/policy-related aspects on work from home.</li></ul> We are just weeks away from the Union Budget 2023 to be presented on 1 February 2023. Budget 2023 will be the 11th consecutive Budget of Prime Minister Narendra Modi and the fifth consecutive budget of Finance Minister Nirmala Sitharaman. The Budget is expected to address critical issues of the elevated levels of inflation currently seen, to boost demand, create jobs and put the economy on a sustained growth path. <div type="image" title="Nitin 1" msid="97125046" hostid="261" caption="&amp;lt;p&amp;gt;&amp;lt;em&amp;gt;Nitin Baijal is Director with Deloitte Haskins and Sells LLP&amp;lt;/em&amp;gt;&amp;lt;/p&amp;gt;"></div> Amongst the various measures required to accomplish the above, one major measure would be increasing the purchasing power of the individual, which can be done by providing personal tax concessions, thereby supporting the revival of the GDP. Below are few expectations of individual taxpayers: Changes in tax slabs and tax rates: Per the current income tax provisions, an individual is required to pay taxes based on slab rates. The highest slab rate (after including surcharge and cess) for income exceeding ₹5 crore in India is at present 42.744%, which is very high compared to other Asian countries (Hong Kong – 17%, Singapore 22%, Malaysia 30%). Further, the tax rate for individuals has not been changed since FY 2017-18, though a new tax regime was introduced in Budget 2020 (in which one could opt for lower slab rates if they forego various deductions and exemptions). However, the simplified regime has not had the desired outcome on individuals’ pockets. Hence, in order to provide a breather to the aam aadmi under the old regime, policy makers could look at increasing the threshold limit for the highest tax rate from ₹10 lakh to ₹20 lakh. Similarly, under the simplified tax regime, the income tax rate could be reduced to 20% for income slabs between ₹10 lakh to ₹20 lakh, and 25% for income exceeding ₹20 lakh. This will make the new regime more attractive vis-à-vis the old regime. The proposed highest slab rate under the simplified regime (including surcharge and cess) would therefore be reduced to 35.62%. <div type="image" title="Sahil Bhasin" msid="97124243" hostid="261" caption="&amp;lt;p&amp;gt;Sahil Bhasin is Senior Manager with Deloitte Haskins and Sells LLP&amp;lt;/p&amp;gt;"></div> Deductions from Income tax to save tax Expectations have been there now for some time to increase the exemption limit on tax saving investment under section 80C to at least ₹2.5 lakhs. The current limit of ₹1.5 lakhs seems quite low and it has remained so since FY 2014-15. With the increase in cost of living and inflation, the government should look at increasing the limit under Section 80C. This will have two-fold benefits — individual taxpayers would be willing to save more and benefit from a lower tax outgo, thereby increasing the overall purchasing power. Currently, 80C allows deduction of tuition fee paid to any university, college, school or other educational institution situated within India for any two children. However, this is allowed under the overall limit of ₹1.5 lakh and hence the deduction is not utilised to the fullest. With cost of education rising rapidly to unprecedented levels, it is pertinent that the said deduction is branched off as a separate deduction similar to medical insurance. Hence the government could consider introducing a separate section to allow a deduction for education expenses. Further, considering the increase in costs of medical treatments, the cost of comprehensive insurance has increased manifold and hence, the erstwhile limit of ₹25,000 (₹50,000 for senior citizens) under this section may be revisited. The limit may be increased to ₹50,000 (₹1,00,000 for senior citizens). Also, it is unlikely that salaried individuals would keep their entire savings in a savings bank account, which earns a much lower rate of interest compared with term deposits. They may transfer some portion of their savings to term/recurring deposits in banks to earn comparatively better returns. Hence, the interest on all types of bank deposits (e.g., FDRs) may be included within the scope of section 80TTA. Further, the limit may be increased from ₹10,000 to ₹50,000. <div type="image" title="Kajal Gupta" msid="97124261" hostid="261" caption="&amp;lt;p&amp;gt;Kajal Gupta is Deputy Manager with Deloitte Haskins and Sells LLP&amp;lt;/p&amp;gt;"></div> Besides the financial expectation highlighted above, the government may also look at announcing certain guidance/policy-related aspects on work from home. After the pandemic, the working culture across organisations has undergone several changes. Organisations have introduced work from home, remote working, hybrid working, etc. However, there are no policies/guidance with respect to various provisions (such as tax, social security, insurance, workman compensation) on account of the new remote work culture. As we all eagerly await for Budget 2023, we hope that expectations of individual taxpayers would be met and correspondingly, growth of the Indian economy is also ensured. (Nitin Baijal is Director with Deloitte Haskins and Sells LLP; Sahil Bhasin is Senior Manager and Kajal Gupta is Deputy Manager at the same firm)

Budget 2023-24: What the common man wants on the personal tax front

<ul><li>The individual taxpayer is amongst the most impacted class in the post-pandemic world.</li><li>While experts believe that the government might keep the tax slabs unchanged, they expect assistance to come in from an easier route.</li><li>This, experts suggest, would allow the government to put more money in the pockets of taxpayers, thereby revitalising spending and consumption, resulting in a boost to the economy.</li></ul>Finance Minister Nirmala Sitharaman is all set to unveil <keyword id="10547300" type="General" weightage="20" keywordseo="budget-2022" source="Orion">Budget 2022</keyword> on February 1, and as always, income tax remains one of the most anticipated announcements to watch out for. Despite the COVID-19 pandemic forcing people to travel less and work from home more, resulting in lower travel expenses, the cost of living has gone up largely due to the rising inflation as well as COVID-related expenses like hospitalisation, medicines and more. Lower disposable incomes lead to lower consumption and eventually, a slowdown in the economy. More money in the pocket leads to people spending more and helping the economy shift gears. And one of the ways to put more in the pocket of the people is by reducing taxes. With that in mind, if you are wondering what’s in it for your pocket, we have experts from one of the Big 4 accounting firms to tell us what to expect from Budget 2022. <cmsannotation type="cmsannotation" annotationid="Why income tax slabs may not change this year" comment="subhead" text="Why income tax slabs may not change this year">Why <keyword id="120700" type="General" weightage="20" keywordseo="income-tax-slabs" source="Orion">income tax slabs</keyword> may not change this year</cmsannotation> “While there are reports stating that there is a need to increase the basic exemption limit (BEL), which is ₹2.5 lakh, my personal take is that it is something that will remain, for the simple reason that the idea is to widen the tax net. If you keep on increasing it [BEL], you are not widening it, so I’d rather keep it the way it is,” Hemal Zobalia, partner at Deloitte Haskins &amp; Sells LLP told Business Insider. “If there is money to be given in the pocket [of taxpayers], I would rather focus on people earning less than ₹10 lakh or ₹15 lakh by increasing the deductions,” he further explained, stating that the government will likely stay away from making any major changes in tax rates. If anything, Zobalia expects the tax slabs on the higher end – for instance, the upper end of ₹10 lakh, could be increased to a higher level. But without touching the tax slabs, how can the government put more money in the pockets of taxpayers? The answer is, via deductions. <cmsannotation type="cmsannotation" annotationid="Standard deduction for salaried individuals needs to go up" comment="subhead" text="Standard deduction for salaried individuals needs to go up">Standard deduction for salaried individuals needs to go up</cmsannotation> Salaried individuals are allowed a standard deduction of ₹50,000 from their gross total income, while computing their taxable income. As a result, this deduction brings down your taxable income by ₹50,000. Zobalia believes that the government could increase this limit and use this as one of the channels to let people have more disposable income in their hands. The increase in standard deduction is even more likely considering the fact that it has remained unchanged for quite some time now – it was hiked from ₹40,000 to ₹50,000 in Budget 2019, the year before the pandemic struck the world. <cmsannotation type="cmsannotation" annotationid="Section 80C deduction for all individuals needs to go up" comment="subhead" text="Section 80C deduction for all individuals needs to go up">Section 80C deduction for all individuals needs to go up</cmsannotation> Another deduction that could see an enhancement from the government is Section 80C, which allows individuals and Hindu undivided families to claim deduction up to ₹1,50,000 for investments in public provident fund, national savings certificate, equity-linked savings schemes among others. The ₹1,50,000 limit has remained unchanged since 2014, and Zobalia believes that it is bound to increase as the government could account for inflation and consider a hike. <cmsannotation type="cmsannotation" annotationid="COVID-related expenses should be allowed as a deduction" comment="subhead" text="COVID-related expenses should be allowed as a deduction">COVID-related expenses should be allowed as a deduction</cmsannotation> Lastly, the pandemic has forced everyone to spend money on hospitalisation and other health-related expenses due to COVID-19 infections. Zobalia expects the government to allow deduction of these expenses, over and above what is covered in Section 80D for insurance. SEE ALSO: <a href="https://www.businessinsider.in/budget/news/the-indian-government-has-spent-less-than-half-the-money-it-had-budgeted-for-capital-investments-so-far/articleshow/88852518.cms">The Indian government has spent less than half the money it had budgeted for capital investments, so far</a> <a href="https://www.businessinsider.in/budget/news/budget-2022-expectation-in-higher-standard-deduction-tax-slabs-and-covid-insurance/slidelist/88891751.cms">From higher standard deduction and change in tax slabs to clarity on Covid insurance, here’s what tax experts want from Budget 2022</a> <a href="https://www.businessinsider.in/business/auto/news/cost-of-owning-and-running-an-electric-scooter-vs-a-petrol-scooter/articleshow/89119184.cms">Here’s how much buying and owning an electric scooter costs in India versus a petrol scooter</a>

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