Inputs on Income tax act by Amit Baid, Head of tax at BTG Advaya
Below The Inputs on Income tax act by Amit Baid, Head of tax at BTG Advaya
"1) Reintroducing Nil withholding certificates helps prevent refund backlogs for genuine zero-tax cases including non-residents entitled to treaty relief on cross-border transactions.
(2) Disallowing all deductions just because a return was late would have punished lakhs of genuine taxpayers. The Committee’s fix restores sanity by limiting this to only certain income-linked deductions.
(3) Without the phrase ‘in the circumstances of the case’, GAAR could have become a tax sledgehammer - treating even bona fide restructurings as abuse. The Committee’s intervention restores balance and guards against overreach on honest transactions.
(4) Many legacy trusts were staring at disqualification under vague definitions. By recommending clarity on ‘wholly for charitable or religious purpose’, the Committee saves hundreds of older institutions from legal limbo.
Chance missed
(5) The Committee missed the chance to resolve the double taxation risk in holding company structures. Denying inter-corporate dividend deduction under the 22% concessional regime not only breaks with past policy logic, but could make this regime unattractive for investment vehicles and cross-border structures.
(6) Tax-neutral treatment for fast-track demergers could be challenging. By not addressing this, the Committee has left a key gap that may discourage intra-group restructurings."
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