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CII strives for readability in tax legal guidelines, simplification and fewer litigation

New Delhi: CII has proposed that the government should clarify tax laws, simplify procedures and reduce litigation in the forthcoming Union budget.

It was suggested that tax laws should facilitate business transitions and facilitate the industry to do business.

In a statement, the industry association stated that Section 80JJAA provides for a 30 percent deduction on the salaries paid to new employees, which can be claimed for three years. This is possible up to a remuneration of Rs 25,000 per month.

CII stressed the need to boost employment at higher levels and suggested raising the cap to 50,000 rupees per month to encourage employment in more skilled occupations as well.

In order to strengthen the financial strength of the banks and to ensure the stability of the financial sector, the RBI has instructed the banks in recent years to increase their NPA provisions. CII has proposed that the Indian banks’ bad debt provision limit in Section 36 (1) (viia) (a) be increased from the existing 8.5 percent to 15 percent.

The Treasury Department has been advised that banks operating in India are facilitating foreign investment through Foreign Portfolio Investment (FPI) by acting as custodians (cash and stocks) for the FPIs investing in India.

“A specific clarification should be given so that banking and brokerage service providers are not regarded as representative experts for their customers,” it said.

Over the years, RBI has reduced the limit for an account to be recognized as an NPA from six months to 90 days. According to the budget recommendations of CII, rule 6EA should be amended so that, in the case of banks, interest on NPA overdue for more than 90 days is excluded from total income and only taxed on a receive basis.

CII has proposed establishing general principles for the import tariff structure and a roadmap to encourage and calibrate domestic production in line with global trade trends. Such a move would strengthen India’s manufacturing capacity and increase its export competitiveness as global value chains shift over the next three to five years.

A tiered roadmap for competitive import tariffs over the next three years has also been proposed, with lowest or 0 to 2.5 percent for intermediate goods or raw materials, highest values ​​of 5 to 7.5 percent for end products and 2.5 to 5 percent for intermediate products . This will help Indian industry to integrate into the global value chain while at the same time becoming competitive with its goods and services in world markets.

According to the industry association, these initiatives would go a long way towards restoring economic growth and moving one step ahead towards a tax-friendly regime.

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