In the ever-expanding global panorama, India has found itself under the spotlight like never before. Weathering the challenges posed by global headwinds and the lingering impact of the pandemic, the Indian economy has showcased remarkable resilience. This can be attributed to a series of reforms, implemented at an impressive pace, particularly in recent years, bolstered by a robust domestic demand.
Sustaining a growth rate exceeding 7% for the past three years, coupled with a strategic plan to curtail the fiscal deficit to 4.5% by FY 26, forms the bedrock for catapulting the GDP from approximately USD 3.7 trillion to an ambitious USD 7 trillion by the year 2030.
The Budget serves as a blueprint for elevating the economy through the pillars of Governance, Development, and Performance. This once again underscores the government’s commitment to providing stability and certainty to taxpayers, a consistent theme in recent years.
Turning attention to specific tax proposals, the Finance Bill advocates for maintaining existing tax rates for both direct and indirect taxes, including import duties, aligning with the essence of the interim budget.
In a bid to stimulate and enhance investments in the International Financial Services Centre (IFSC), the Finance Bill suggests an extension of the sunset clause for the commencement of operations by Offshore Banking Units, Category I Foreign Portfolio Investors (FPIs), and IFSC units engaged in leasing aircraft or ships. This extension spans an additional year, from 31 March 2024 to 31 March 2025.
A parallel extension is proposed for investments made by sovereign wealth funds and pension funds, extending the timeline for availing exemptions related to income in the form of dividends, interest, and long-term capital gains.
The deadline for the incorporation of eligible start-ups has also been prolonged, shifting from 31 March 2024 to 31 March 2025. This move is poised to invigorate the startup ecosystem. Notably, the government aims to introduce a faceless scheme for Dispute Resolution Panel, Tax Tribunal, and Transfer Pricing proceedings by 31 March 2025. Additionally, in a stride towards coherence, the input service distributor mechanism is slated to become mandatory.