The CA Institute has suggested to the government that tax incentives be extended to entities exclusively engaged in skill development programmes, considering their contemporary relevance and importance. 

In its pre-budget memorandum for the full budget slated for June 2024, the Institute of Chartered Accountants of India (ICAI) has also suggested that tax incentives be entities engaged in green projects that impact environment positively. 

Also, interest income earned by the subscribers of green bonds may be exempt or, in the alternative, be subject to a concessional rate of tax, ICAI has suggested. The pre-budget memorandum has been submitted to the Central Board of Direct Taxes (CBDT).

Ranjeet Kumar Agarwal, President, ICAI, said, “In order to enhance green finance and encourage green projects, we have advocate for special incentives to entities undertaking Green Projects and propose exemption for interest income of subscribers of green bonds issued by such entities”.

He highlighted that ICAI has pioneered formulating Standards on Sustainability Reporting, shaping the ESG reporting landscape in the country. 

In line with the Government’s campaign to promote education of the girl child, a separate provision for deduction of expenses relating to education of girl child both under the default tax regime and alternative tax regime has been suggested in the Memorandum.

The significant suggestions relating to the Personal Taxation regime include provision of deduction for Mediclaim premium paid under the default tax regime, regular enhancement of standard deduction and option of joint taxation for married couples.

The pre-budget document encapsulates a spectrum of recommendations aimed at fostering economic growth, encouraging environmental sustainability, and enhancing social welfare through prudent tax reforms.

On the business taxation front, the suggestions include alignment of the provisions of tax audit with the presumptive income provisions, further simplification of presumptive income regime and increase in threshold for computation of allowable remuneration of partners. 

In addition, the Memorandum also contains suggestions for rationalisation of the provisions relating to taxation of charitable trusts. 

Allowing filing of updated return in case of reduction in losses and permitting filing of such return where assessment proceedings are completed are some important suggestions in relation to return filing. 

The Pre-Budget Memorandum 2024 emphasises the importance of rationalizing direct tax laws, minimizing litigation, and enhancing tax collection mechanisms, all geared towards fostering a conducive fiscal environment for the year 2024-25.