Union Budget may ease tax on transfer of stressed assets; reforms report likely
Demonetisation and a report card on its impact on bringing more people into the tax net is also likely feature in the Union Budget.business Updated: Jan 22, 2018 21:06 IST
The Union Budget is likely to offer a stamp duty waiver, exemption from seeking a no-objection certificate from the tax department and clarity on the Minimum Alternate Tax (MAT) on the purchase and sale of stressed assets undergoing insolvency proceedings, a government official said on Tuesday.
“The Indian Stamp Duty Act is under the central government. The finance minister can propose a waiver of the duty on transfer of stressed assets during insolvency proceedings. States have the right to decide the rate of the duty and so this will not be binding. With so many states now under BJP rule, it should not be a problem,” said the official.
He added that the Budget will also do away with the need for a no-objection certificate (NOC) from the tax department for arm’s length transaction valuation in cases involving transfer of assets under section 281 of the I-T Act. The arm’s length principle works on the fact that the parties to a transaction are independent and on an equal footing.
“There is need for clarity on MAT on transfer of stressed assets, and the Budget will provide that by waiving off MAT,” said a second government official in the know of the matter.
MAT is paid by companies on notional gains and debt waivers on stressed assets could attract it.
“Such changes in the Insolvency and Bankruptcy Code (IBC) will go a long way in improving ease of doing business in India and also hasten the process of transfer of assets under the insolvency process,” said insolvency expert, Sumant Batra.
Keeping with the theme of reforms, Union finance minister Arun Jaitley may focus on the Goods and Services Tax (GST). He is expected to refer to the work of the GST Council and the process of further rationalisation of rates and simplifying the tax filing process, when he presents the Budget on February 1.
Demonetisation and a report card on its impact on bringing more people into the tax net is also likely feature in the Budget.
First Published: Jan 16, 2018 23:41 IST