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The Finance Industry Development Council (FIDC) has urged the Government to bring NBFCs in sync with banks on the aspect of tax matters.
Just as the revised regulatory framework for NBFCs brings parity with banks, there is a need to bring parity on tax matters too, FIDC said in its recent pre-budget interaction with Finance Minister Arun Jaitley.
"We had highlighted to the Finance Minister the tax issues that are gravely affecting the ease of doing business for NBFCs," Raman Aggarwal, Chairman, FIDC, told BusinessLine here post the pre-budget meeting.
NBFCs are suffering from a distinct negative bias on tax issues, inspite of indulging in similar activities like banks, according to FIDC.
Aggarwal said that FIDC has made representations on tax issues specially pertaining to tax deduction at source, income recognition on NPAs, and dual taxation on lease/hire purchase.
In the case of NBFCs, the current legal framework does not allow tax deduction on the provision made for non-performing assets. However, banks are permitted to claim tax deductions for such provisioning. This has put NBFCs at a disadvantage.
FIDC is a self regulatory body representing asset financing Non banking finance companies (NBFC).
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