Ahead of the upcoming budget, Deloitte India has released key recommendations for personal taxation, emphasizing the need to simplify compliance, resolve ambiguities, and ease the burden on taxpayers, especially those working across borders.
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Deloitte’s top priorities tackle compliance hurdles faced by global professionals:
- ESOP Taxation Clarity: Deloitte urges the CBDT to issue standard guidelines, including a clear formula, for taxing Employee Stock Option Plans (ESOPs) for cross-border employees. This will reduce litigation by clarifying how to apportion tax based on the location of services.
- Foreign Tax Credit at Source: To resolve immediate cash flow issues caused by high TDS in India, Deloitte recommends a framework allowing tax withholding adjustments based on foreign taxes already paid. This aligns India with global practices.
- Extended Return Deadlines: They suggest extending the deadline for filing revised or belated returns (to March of the assessment year) for Resident and Ordinarily Resident taxpayers with foreign income, minimizing mismatches with international tax calendars.
EV Valuation & Compliance Simplification
Beyond global issues, the advisory firm highlighted key domestic improvements:
- EV Valuation Rules: With the increase in employer-sponsored electric vehicles (EVs), Deloitte calls for the CBDT to issue immediate regulations clarifying the valuation of EVs as a taxable perquisite, reducing uncertainty for both businesses and employees.
- Modernizing Compliance: To enhance the taxpayer experience, Deloitte recommends several technological and procedural fixes, including:
- Implementing a real-time refund tracking dashboard.
- Simplifying TDS compliance for property transactions involving Non-Resident sellers.
- Modernizing the Capital Gains Account Scheme (CGAS) through online management and integration with the income tax portal.
These recommendations aim to leverage India’s economic resilience by providing a more predictable and user-friendly tax environment.
