P.C. Mody, Chairperson, Central Board of Direct Taxes (CBDT), Ministry of Finance, Government of India today said that going forward startups should not have any concern related to taxation as the Budget has proposed a number of measures to resolve the legacy issues.

Speaking at 'FICCI Interactive Session on Union Budget 2019-20', Mody said, "At least in future, there should not be any cause for concern or friction in the minds of the startups. The legacy issues are being dealt with separately. We are already working on that and administrative mechanism is being put in place to resolve it."

Mody further added that the Budget gives new direction to some of the tax processes to bring in 'ease of tax compliance', which is an integral part of 'ease of living'. Citing the prefilling of tax returns in case of salaried individuals as an example, he said that it will not only save time spent on tax compliance but also would be more accurate.

"Second example would be the proposed scheme which we plan to rollout soon, that is, an anonymised, faceless scrutiny procedure. Once we rollout this, all that so-called friction between the department and the taxpayer would get ultimately eliminated or in the short while at least minimised," Mody said.

Another area where the ease of tax compliance is noticed is the interchangeability of PAN and Aadhaar, Mr Mody added. Further, he said the Budget has also raised the threshold to Rs 10,000 from Rs 3,000 for initiating prosecution, as part of ease of compliance for the taxpayers. The compounding guidelines have been made liberal, he added.

Mody further said that the Budget was distinct from earlier ones as it provides a clear vision and a roadmap for India?s journey towards becoming a $5 trillion economy. Policy statements in the budget give a clear direction, he added.

"The tax mobilisation targets which have been given to us (CBDT) are on a very realistic note and when that happens, I think the other incidental operational issues also get resolved to some extent," he stated.

On the proposed increase in public shareholding of listed companies from 25% to 35%, Sandip Somany, President, FICCI said, "While this can promote greater liquidity in stocks and attract more institutional and retail investors, it has several implications for promoters who will be forced to dilute their stake in order to meet the threshold."

Somany added, "We earnestly request government and SEBI to have adequate consultations on this matter before the proposal is taken forward."

Published On : 10-07-2019

Source : SME Times