Wednesday, March 3, 2021
  • About
  • Advertise
  • Careers
Scoftware Magazine
  • Home
  • Politics
  • Business
  • Culture
  • Opinion
  • Lifestyle
  • Entertainment
  • Login
No Result
View All Result
Scoftware Magazine
Home Business

Union Budget 2021: Nirmala Sitharaman’s annual financial statement should seek to attract more FDI

Jaleel M. by Jaleel M.
January 28, 2021
in Business
0
Union Budget 2021: Nirmala Sitharaman’s annual financial statement should seek to attract more FDI
0
SHARES
5
VIEWS
Share on FacebookShare on Twitter


With the effect of the pandemic easing out in India and hope for a speedy revival, this Budget is expected to be a gamechanger.

Related posts

Mukesh Ambani climbs to eight spot on Hurun Global Rich List, 40 Indians enter billionaire’s club

Mukesh Ambani climbs to eight spot on Hurun Global Rich List, 40 Indians enter billionaire’s club

March 3, 2021
Sensex reclaims 50,000-benchmark amid hectic buying in IT, auto, FMCG sectors; Nifty ends in green

Sensex reclaims 50,000-benchmark amid hectic buying in IT, auto, FMCG sectors; Nifty ends in green

March 2, 2021

Union Budget 2021: Nirmala Sitharaman's annual financial statement should seek to attract more FDI

US dollars. Image courtesy Jericho/Wikimedia Commons

In recent times, the Centre has undertaken several steps to attract foreign investors and boost the Indian economy. By opening up and increasing Foreign Direct Investment (FDI) in several sectors it has unlocked the gate of opportunities. Through the Finance Act, 2020, it provided a reduced tax rate of 15 percent for new manufacturing units in order to provide a boost to the manufacturing sector. Taking this baton further, it is expected that the Union Budget 2021 will dole out several incentives to project India as a country, of immense opportunity. Here are certain tax proposals that could aid in attracting foreign investments.

Safe harbour rules

In order to bring tax certainty and reduce Transfer Pricing litigation, the Safe Harbour Rules were introduced in 2013. These rules provide the transfer price declared by an eligible taxpayer in respect of a specified transaction to be accepted by the revenue authorities, subject to fulfilment of specified conditions. While these rules were valid till the fiscal year 2018-19, its applicability was till FY 2019-20. The Budget should extend the validity of this Rule by at least two more years.

Further, due to the COVID-19 pandemic, businesses have been severely impacted and have seen a downturn. The parameters mentioned in these rules may not be applicable during these times. Hence, the Budget should also rationalise the parameters to bring them in line with the current economic situation.

Individual residency

The sudden lockdown resulted in several expats being stranded in India. With the extended lockdowns and restriction on international travel, stranded foreign nationals/non-residents were at risk of being regarded as Indian tax residents. To resolve this issue, the Central Board of Direct Taxes had issued a circular relaxing the period to be considered for computing the tax residential status. However, such relaxation was for FY 2019-20 only. With the travel restriction and lockdown spilling to FY 2020-21, the Budget should bring similar relaxations for subsequent years as well.

Place of effective management (POEM)

The overstay of an individual due to the COVID-19 induced lockdowns and restriction on international travel led to an exposure of foreign companies having a POEM in India if the overstaying individual happened to be a key decision-maker. Once a foreign company has a POEM in India, it is regarded as a domestic company for income tax. Since the overstay in India is not intentional but is forced by uncontrolled circumstances, the Budget should provide some relaxation for cases where the key decision-makers had to stay in India.

Cross border transaction

Indian companies are now transforming themselves to have a more global outlook. They are scouting for opportunities to expand their operations overseas. One of the ways for expanding the business is by way of acquisitions and mergers with offshore companies. While a merger of two Indian companies, subject to fulfilment of certain conditions, is tax neutral, a similar tax benefit is not available when one of the firms is not an Indian company. Hence, the Budget should introduce a provision to bring the merger of an Indian company and a foreign company within the ambit of a tax neutral merger.

Overseas listing

In May 2020, the finance ministry announced that Indian companies will be permitted to list in overseas foreign exchanges. This is a welcome move as it will give more fund-raising opportunities to Indian companies. Currently, Indian listed companies enjoy certain tax benefits (say a change in management control will not result in a lapse of brought forward business losses). This Budget should extend the tax benefits/relaxations available to an Indian listed company to Indian companies listed on overseas foreign exchanges as well.

With the effect of the pandemic easing out in India and hope for a speedy revival, this Budget is expected to be a gamechanger. The finance minister’s announcement that this Budget will be a never like before one, has only doubled the expectations of citizens and businesses alike. While the government has taken steps to attract FDI, a tax certainty will increase the confidence of foreign players and hopefully, this Budget will address various concerns of foreign investors.

The writer is Partner and Leader – Tax and Regulatory Services, BDO India

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.



Source link

Previous Post

Economic Survey to be presented in Parliament tomorrow; all you need to about FinMin’s flagship report on economy

Next Post

Union Budget 2021: Cut in taxes will put more money in consumer hands, will boost gold buy

Next Post
Union Budget 2021: Cut in taxes will put more money in consumer hands, will boost gold buy

Union Budget 2021: Cut in taxes will put more money in consumer hands, will boost gold buy

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

RECOMMENDED NEWS

Pink Martini Celebrating International Friendship Day, New “Let’s Be Friends” Merch Available at the Pink Martini Store

Pink Martini Celebrating International Friendship Day, New “Let’s Be Friends” Merch Available at the Pink Martini Store

7 months ago

Christian Festival Association Adds Exciting Additions to this Saturday’s Hope Lives Virtual Festival

8 months ago
ADVERTISEMENT RELEASE NEW SINGLE “FREEDOM”

ADVERTISEMENT RELEASE NEW SINGLE “FREEDOM”

9 months ago
David Warner, Daughters Show Off ‘Thumkas’ In Latest Video

David Warner, Daughters Show Off ‘Thumkas’ In Latest Video

9 months ago

FOLLOW US

  • 81 Followers
  • 29.5k Followers
  • 108k Subscribers

BROWSE BY CATEGORIES

  • Business
  • Culture
  • Entertainment
  • Lifestyle
  • Music
  • National
  • News
  • Opinion
  • Politics
  • Sports
  • Tech
  • Travel
  • World News

BROWSE BY TOPICS

2018 League Balinese Culture Bali United Budget Travel Champions League Chopper Bike Doctor Terawan Istana Negara Market Stories National Exam Visit Bali

POPULAR NEWS

  • Kris Jenner Spills Details About Her Sex Life With Corey Gamble: Watch

    Kris Jenner Spills Details About Her Sex Life With Corey Gamble: Watch

    0 shares
    Share 0 Tweet 0
  • Common Saints Release New Single “Idol Eyes”

    0 shares
    Share 0 Tweet 0
  • Sam Heughan & Graham McTavish Are Men in Kilts for Travel Show

    0 shares
    Share 0 Tweet 0
  • KRISTIN LASH & JAKOB GREY Team Up On “Sleeping With The Lights On”

    0 shares
    Share 0 Tweet 0
  • A Blackhat Hacker Durgesh Singh Kushwah Tells Us All!

    0 shares
    Share 0 Tweet 0
  • About
  • Advertise
  • Careers

© 2020 Scoftware.com

No Result
View All Result
  • Home
  • Politics
  • Business
  • Culture
  • National
  • Sports
  • Lifestyle
  • Travel
  • Opinion

© 2020 Scoftware.com

Welcome Back!

Login to your account below

Forgotten Password?

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Terms and Conditions - Privacy Policy