ICAI seeks tax sops for green projects, skill initiatives

The Institute of Chartered Accountants of India (ICAI) has sought tax incentives for entities engaged in green projects that impact the environment positively and entities exclusively engaged in skill development programmes.

 In a Pre-Budget Memorandum 2024 submitted to the Central Board of Direct Taxes (CBDT), the statutory body for the regulation and development of the profession of Chartered Accountancy in India also proposed that interest income earned by the subscribers of green bonds may be exempt or, in the alternative, be subject to a concessional rate of tax.   

The institute said that 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 will help. 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.

“ICAI has pioneered formulating standards on sustainability reporting, shaping the ESG reporting landscape in the country. In order to enhance green finance and encourage green projects, we have advocated for special incentives to entities undertaking Green Projects and proposed exemption for interest income of subscribers of green bonds issued by such entities,” Ranjeet Kumar Agarwal, President, ICAI, said.

On the business taxation front, ICAI memorandum proposed 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. 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. 

Rationalisation of the tax rate under section 115BBE (as well as the surcharge thereon) on deemed income under sections 68 to 69D has been suggested.

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.

With around 8.5 lakh students and over 4 lakh members, ICAI is the largest professional accountancy body in the world. It has a wide network of 5 Regional Councils and 175 branches within India and a global presence with 50 overseas Chapters and 31 Representative Offices spanning 81 cities across 47 countries.