Lok Sabha panel proposes over 30 changes in Income Tax Bill
The committee has suggested changes in definition of capital asset, infrastructure capital company, MSME, while clarifying property-related deductions, and reinforcing the 'actual payment' rule for business expenses.
The committee has proposed the reinstatement provision enabling the tax department to issue a nil withholding tax certificate for specific payments. This clause was initially omitted from the draft bill, which previously only permitted certificates for low TDS deductions. It has also recommended permitting refund claims even where returns are not filed on time.
The report also addresses concerns of charitable and not-for-profit entities by advocating clearer definitions, replacing "receipts" with "income" for tax purposes, and restoring the concept of "deemed application". Further, it urges inclusion of professionals under electronic payment norms, prescribes qualifications for valuers, and recommends contextual fairness in GAAR provisions.
In a major relief, the committee has noted that the benefit of tax deduction relevant to inter corporate dividends in multi-tiered structures must also be extended to companies that chose the 22% tax rate, as is the case now.
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