Ketan Dalal, Senior Tax Partner at PwC adds that the incremental taxing of offshore fund investors will cause panic.
This form of tax comes as part of a larger scheme, where the multi-national companies (MNCs) are seen to be avoiding tax in every jurisdiction, says Ketan Dalal, Senior Tax Partner at PwC.
In an interview to CNBC-TV18's Latha Venkatesh and Sonia Shenoy; HP Ranina, Corporate Lawyer; Sudhir Kapadia of EY and Ketan Dalal, Senior Tax partner at PwC India shared their expectations from Arun Jaitely's Union Budget and their outlook on the road ahead.
Recent reports have suggested that the government is mulling whether to change the definition of 'long term' from one year to three years, thus ensuring that investors don't exit till three years unless willing to pay tax.
The FIIs have, however, decided to challenge the tax demands, stating that MAT cannot be levied on FIIs or FPIs as they do not earn any 'business income' in India and their income is defined as 'capital gains' under the I-T Act.
The Make in India campaign is centered on a pretty lofty target - increasing the contribution of manufacturing to 25 percent of GDP by 2022 versus the current 16 percent.
Budget 2015: Big Ideas Or Small Changes?
Vodafone wants to include the Rs 3700 crore transfer pricing issue, which according to the revenue department goes went against the Cabinet approval on conciliation that had been given on June 3. The Vodafone stance has always been to fix all the tax issues in one go.
Year 2014 also holds greater scrutiny of corporate India with SFIO being given teeth with powers for suo-motu investigations, search, seizure and arrest. So, with all these measures in place, the question is, will we see greater compliance in 2014?
Focusing on the troubled legacy for taxation from the previous budget, CNBC-TV18's special show Taxing Times, brings on the discussion board key issues like general anti-avoidance rule (GAAR) with a panel of eminent experts.
The Parthasarathi Shome Committee set up by the government has said retrospective amendments in tax laws targeting overseas mergers and acquisitions of companies with assets in India, should be scrapped.
The recommendations on GAAR made by Shome panel has been well received across industries. Speaking to CNBC-TV18, Ketan Dalal of PwC lauded the recommendations saying it is the most pragmatic report designed to draw investments from FIIs.
Ketan Dalal of PricewaterhouseCoopers (PwC) analyses, on CNBC-TV18, the implications of the committee to prepare fresh norms on GAAR announced by the Prime Minister
While Ketan Dalal, joint leader, tax and regulatory services, PWC does not see the GAAR being scrapped, he said that the position on GAAR remains unchanged post the draft guidelines as the market still needs clarity on specific issues.
Imagine climbing a steep hill. The first 50 steps take you to the Advance Ruling Authority. Then a few hundred and you‘re at the Tribunal. Then you trudge for hours to reach the High Court. Some win there, others lose and take a deep breath with the Supreme Court in sight.
Foreign portfolios in India have been left shaken on implementation of certain provisions in the General Anti-Avoidance Rules (GAAR) by Income-Tax officials. The fear that FIIs will start pulling money out of India has left the market in turmoil.
Ketan Dalal, Porus Kaka and TP Oswal join The Firm to discuss whether Budget 2012 is retrospective or retrograde.
So will this be the last budget in the history of budgets as we know them in India?