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Rationalisation of Dividend Distribution Tax (DDT): This Budget may see a reduction in the DDT rate, or bring about a change in the manner of dividend taxation in order to make it a shareholder-level tax.
Personal tax cuts – a tight rope walk to manage expectations: The Budget may attempt a rationalisation of tax slabs and/or provide for a reduction in the tax rates for individuals.
MAT – need for revisions :One can expect the MAT regime to be revisited in terms of the manner in which the MAT is computed, with a view to do away with the complications involved around it.
Tax rates for foreign companies and firms/LLPs: The tax rate applicable to foreign companies and LLPs could be revisited in light of the recent tax cuts for domestic companies.
Managing dispute resolution: The government may devise new ways of resolving disputes, particularly in case of transfer pricing and foreign companies.
Freeing up tax dues locked in litigation:The government could explore a new dispute resolution scheme to free up tax dues that are locked up in long pending litigation.
Increased use of technology to ease compliance burdens on taxpayers: The government could explore additional measures to enhance use of technology in tax compliance e.g. in terms of filing returns, reporting transactions, communications by the department, etc.
Simplification of certain provisions: The Budget may witness re-drafting of the law in case of certain complex provisions, e.g. provisions on capital gains taxation. This would bring simplicity in the language and comprehensibility of the law.
To boost the demand for domestic manufactured products, one can expect changes in the customs duty rates specifically for import of finished products.
In addition to the above, one can also expect the introduction of ‘the Border Adjustment Tax’ under the Customs Law. The same is expected to be introduced with intention to offset the impact of various local levies viz. electricity duty, levies on fuels etc. which do not form part of GST. The introduction of BAT is expected to create a level playing ground for the domestic products vis-à-vis imported goods.