Share Market Highlights 30 January 2025: Markets extend rally to third day; Sensex rises 226 pts to close at 76,759, Nifty ends above 23,200
Rajiv Bhutani, Partner, Transfer Pricing, Tax & Regulatory Services, BDO India
Compliance
Maintenance of TP Documentation: Since the introduction of TP provisions in 2001, the threshold for maintaining TP documentation for taxpayers has been set at INR 1 crore in aggregate value of international transactions. However, as businesses expand and related-party transactions increase, this threshold appears outdated. The expectation is to raise the threshold for mandatory TP documentation at INR 10 crores, in line with the growing scale of multinational enterprises in India.
Exemption of Non-Residents from TP Certification: Currently, non-resident taxpayers earning income from interest, dividends, royalties, or technical fees, do not need to file their income taxreturn in India, provided taxes have been appropriately deducted on said income by the taxpayer. However, these taxpayers are still required to mandatorily furnish a TP Certificate if such taxableincome is earned from parties in India. Given that these non-resident taxpayers are exempted from furnishing their income tax return subject to meeting the above stated conditions, it is recommended that such taxpayers should also be exempted from furnishing the TP certificate, aligning with the broader tax compliance simplification.
Recalibration of the Arm’s Length Range: Under the existing TP regulations, India uses an arm’s length range between the 35 th and 65 th percentiles while determining arm’s length pricing. However, this range diverges from internationally accepted standards. To align India’s regulations with global norms, the expectation is to revise the range to an interquartile range, spanning from 25 th percentile to the 75 th percentile, which better reflects the true variability in arm’s length pricing.
Dispute Management and Resolution
Expedited Advance Pricing Agreement (APA) Process: The APA regime has been a powerful tool for Indian taxpayers looking to mitigate related-party transaction disputes and achieve certainty on their arm’s length pricing. While the APA program has been successful as compared to traditional dispute resolution routes delays in processing APA applications have resulted in a significant backlog. To enhance efficiency, we recommend streamlining the APA process by categorising applications based on their complexity. Complex cases could be allocated to more experienced teams, while simpler cases should be subject to shorter timelines for resolution. This bifurcation would enable faster conclusions, benefitting both the tax authorities and taxpayers.
Expansion and Re-evaluation of Safe Harbour Provisions: Plenty of small taxpayers have opted for the Safe Harbour regime in order to conclude their arm’s length pricing in a streamlined manner. However, the applicable benchmarks are typically higher in this regime as compared to available alternatives. While the small taxpayers do get to enjoy this benefit of convenience, the threshold restrictions in the Safe Harbour regime makes it inaccessible to the taxpayers with comparatively higher value of transactions, forcing them into complex dispute resolution processes. To make this regime more accessible, the Government may re-evaluate the Safe Harbour provisions by (a) increasing the transaction thresholds to cover a larger number of companies, and (b) adjusting the rates to be closer to actual comparable benchmarks, thereby encouraging broader adoption andreducing litigation risks.”
—–
Deepashree Shetty, Partner, Global Employer Services, Tax & Regulatory Services, BDO India
“The Budget announced in July 2024 brought limited changes for individual taxpayers, leaving many to hope that the upcoming Budget 2025 will deliver the much-needed tax relief to alleviate their financial pressures. There is a strong expectation that the government will focus on improving taxpayers’ savings by introducing reforms such as a unified tax regime and enhanced deductions.
The Dilemma of Old vs New Tax Regimes – The introduction of two tax regimes – Old Tax Regime (OTR) and New Tax Regime (NTR) – was intended to offer taxpayers flexibility, allowing them to choose the system that best suits their investments, savings habits, and preferences. However, the reality has been far more complex. Many taxpayers find themselves confused between the two regimes, often reassessing their choice not only during the year but also while filing their tax returns. In light of these complexities, the upcoming Budget should focus on simplifying the tax structure for individual taxpayers by consolidating the current dual regimes into a single, cohesive tax framework. While this shift may take time, it is anticipated that the OTR may eventually be phased out, with its abolition ideally scheduled for FY 2026-27 to provide ample time for taxpayers, employers, and financial institutions to adjust.
A Single, More Beneficial Tax Regime – Since the introduction of the NTR, the options for tax savings have been limited, making it essential to reconsider and amend the structure for the benefit of taxpayers. While the NTR is preferred as a streamlined tax system, it can be made even more effective by incorporating the following key changes:
Simplification of income tax slabs and rates:
Increasing the basic exemption limit of income from INR 3 lakhs to INR 5 lakhs
The differences between tax slabs are currently inconsistent at INR 2 lakhs or INR 3 lakhs. A more uniform approach is needed with consistent income gaps.
Introducing a new 25% tax rate slab will provide further tax relief for middle-income earners. The tax rates currently stand at 5%, 10%, 15%, 20% and 30%.
The income limit for the 30% should be enhanced from INR 15 lakhs to INR 20 lakhs.
Inclusion of popular deductions under the NTR:
Section 80C: Allow deductions up to INR 2 lakhs for life insurance premiums, employees’ Provident Fund contributions, etc.
Section 80D: Extend the deduction up to INR 1 lakh for health insurance premiums for self and family, addressing the growing burden of medical expenses.
Section 80TTB: Include a deduction of up to INR 50,000 for senior citizens earning interest from deposits with banks, post offices, etc.
10(13A): Allow salaried taxpayers to claim HRA deductions for rental expenditure under the NTR.
These proposed amendments will make the NTR not only simpler but also more tax-efficient”
—–
Santhosh Sivaraj, Partner, Global Employer Services, Tax & Regulatory Services, BDO India
Standard Deduction Limit – “With the well-awaited Budget 2025, the salaried individuals would be expecting some relief to the tax costs they bear on the salary income. With the introduction of the New Tax Regime in recent years, in the 2024 budget, the Hon’ble Finance Minister (FM) announced the allowability of an increased standard deduction of INR 75,000 per annum for those who opt for New Tax Regime as against INR 50,000 per annum who opt for Old Tax Regime. Standard deduction was abolished in the Financial Year (FY) 2005-06 and Late Hon’ble FM, Arun Jaitley reintroduced standard deduction in the 2018 budget.
As per the 2018 budget speech, the Late Hon’ble FM mentioned “To provide relief to salaried taxpayers, I propose to allow a standard deduction of INR `40,000/- instead of the present exemption regarding transport allowance and reimbursement of miscellaneous medical expenses….Apart from reducing paperwork and compliance, this will help middle-class employees even more in reducing their tax liability…”
While in Financial Year 2018-19, there were no two separate tax regimes, INR 40,000 was reintroduced as a standard deduction towards transport allowance and miscellaneous medical expenses. Owing to the inflation and increase in prices in both transport and medical since FY 2018-19 since the time standard deduction was reintroduced, the Hon’ble FM should look at bringing in parity for those opting for either the Old or the New Tax Regime and increase the standard deduction to a minimum of INR 1.20 lakhs a year. This would seem practical as any salaried taxpayer would be incurring INR 10,000 a month / INR 1.20 lakhs a year collectively towards transport and medical expenses.”
—-
Kunal Gala, Partner, Deal Value Creation, BDO India
“Digital infrastructure is likely to be a top priority in the Union Budget 2025, with continued investments being expected in projects like BharatNet to connect more than 6 lakh villages with high-speed broadband. Investments will also focus on expanding the 5G coverage which will be essential to enable the advancements in IoT, telemedicine, and smart city solutions. These will contribute to India’s digital transformation and bridge the rural-urban divide. To bolster this effort, subsidies for establishing data centers critical for cloud computing and AI-driven applications may be introduced which could attract global technology investments. It will also be crucial to implement robust cybersecurity frameworks and to ensure compliance with the Data Protection Bill to protect digital assets as India’s digital economy becomes more and more critical to its GDP growth”
Kunal Gala, Partner, Deal Value Creation, BDO India
“The Union Budget for the year FY26 is likely to face the double challenge of boosting up the economic growth and achieving fiscal consolidation. The GDP growth rate reduced to 5.4% in the second quarter of the financial year 2024-25 (against RBI projection of 6.8%) and the government has a fiscal deficit target of less than 4.5% of the GDP for the fiscal year 2025-26, so the spending priorities will have to be set properly. Corporate tax rates are not likely to be increased as India is looking to attract foreign capital, especially for large-scale projects. Investors remain cautious as Indian government bonds offer only ~ 2% higher yield than U.S. Treasury notes, reflecting limited risk-adjusted returns. Delaying the fiscal deficit target by a year to put more money into infrastructure and to satisfy the middle class could be a reasonable approach to turn around the economic growth and to create jobs.”
Kunal Gala, Partner, Deal Value Creation, BDO India
“With as few as 7% of the population i.e. about 75 million people, filing returns last year and 63% of return-filing individuals paying no tax, there is a systemic problem concerning compliance and income disclosure. Since a small group of high earners are responsible for most of the taxes, there is the need for reforms that not only simplify the tax code but also expand its base. The government is probably going to concentrate on making the system more inclusive and efficient, covering more of the population. Middle-class concerns such as compliance measures, tax complexity, and public services are critical to addressing the measures that need to be taken to keep a large population benefitted. A balanced approach is necessary to ensure sustainable revenue growth and reduce reliance on indirect taxes, which disproportionately impact lower-income groups.”
—-
Aakash Uppal, Partner & Leader (North & East), Corporate Tax, Tax and Regulatory Services, BDO India
Personal Income Tax: Under the existing tax regime, individuals with annual earnings up to INR 5 lakhs are exempt from paying taxes, while the new tax regime raises this threshold to INR 7 lakhs, aiming to provide more relief to taxpayers. The Government is expected to further enhance the new tax regime by increasing the basic exemption limit, adjusting tax slabs, and raising the standard deduction. Additionally, there is speculation that the Government may introduce a sunset clause for the old tax regime, gradually phasing it out in favor of the new system. These measures would make the new tax regime more taxpayer-friendly, encourage savings and investments, and support economic growth.
Concessional Tax Rate for Manufacturing Companies: In 2019, a concessional tax rate of 15% was announced for new manufacturing companies that began production on or before 31 March 2024. However, this relief was not extended by the Finance Act (No. 2), 2024. Currently, a tax rate of 25.17% (including surcharge and cess) is applicable for companies that could not benefit from the earlier concessional tax regime for manufacturing companies. The DTC may reintroduce this concessional tax rate to further support the government’s Make-in-India initiative, maintaining India’s appeal as a destination for new manufacturing investments. While the Production Linked Incentive offers some relief, an additional tax incentive would further bolster the sector’s growth.
Capital Gains Income: The DTC has simplified the categorization of assets for capital gains purposes, consolidating multiple holding periods into a single 24-month period, except for listed shares.. However, the holding period for new assets under section 54 of the Act remains at three years, which could be rationalized and brought down to 24 months. Moreover, there is a strong industry expectation that the exemption limit for Long-Term Capital Gains (LTCG) on equities, currently set at INR 1.25 lakh, may be increased to INR 2 lakh or higher, which would allow investors to retain a greater portion of their returns.
Aakash Uppal, Partner & Leader (North & East), Corporate Tax, Tax and Regulatory Services, BDO India
BEPS: Pillar Two: India is among the 140 countries that have signed on to the OECD’s Global Anti-Base Erosion Rules on Pillar Two. These rules are designed to prevent multinational groups from exploiting tax arbitrage by ensuring that they pay a minimum effective tax rate of 15% in every jurisdiction where they operate. Currently, around 30 countries which have implemented Pillar Two Rules in 2024, with another 30-35 countries expected to follow suit in 2025. While India has committed to the Pillar Two framework, it has taken a cautious approach by not incorporating it in previous budgets. Therefore, it will be crucial for the Government to clarify the application of Pillar Two in DTC and outline the reporting requirements in the upcoming Union Budget.
Simplification of Tax Filing and Reduction in Litigation Timeline: Filing tax returns for non-salaried taxpayers has become increasingly cumbersome due to the extensive information required in the forms. There is a strong need within the DTC to streamline these forms by simplifying the language and rationalizing the information requests. Additionally, under the Faceless Assessment Scheme, taxpayers face operational challenges such as the lack of grievance filing options, no provision for rectifications, and limited opportunities for early hearings with faceless Commissioners of Income Tax. These inefficiencies lead to protracted litigation and significant amounts of tax revenue being locked in disputes. The DTC should address these issues by introducing an operational framework to improve the functioning of the Faceless Assessment Scheme, thereby reducing the backlog of pending appeals.
Other Key Amendments: The DTC is also expected to bring about several other important changes. These include shifting to a calendar year for tax purposes instead of the financial year, simplifying the residential status for individuals by removing complex categories like ‘Resident but not Ordinary Resident’, introducing unified tax rates for domestic and foreign companies, and expanding the tax base for withholding taxes. Additionally, further rationalizing of withholding tax rates and provisions is anticipated.
Rajiv Bhutani, Partner, Transfer Pricing, Tax & Regulatory Services, BDO India
Compliance
Maintenance of TP Documentation: Since the introduction of TP provisions in 2001, the threshold for maintaining TP documentation for taxpayers has been set at INR 1 crore in aggregate value of international transactions. However, as businesses expand and related-party transactions increase, this threshold appears outdated. The expectation is to raise the threshold for mandatory TP documentation at INR 10 crores, in line with the growing scale of multinational enterprises in India.
Exemption of Non-Residents from TP Certification: Currently, non-resident taxpayers earning income from interest, dividends, royalties, or technical fees, do not need to file their income taxreturn in India, provided taxes have been appropriately deducted on said income by the taxpayer. However, these taxpayers are still required to mandatorily furnish a TP Certificate if such taxableincome is earned from parties in India. Given that these non-resident taxpayers are exempted from furnishing their income tax return subject to meeting the above stated conditions, it is recommended that such taxpayers should also be exempted from furnishing the TP certificate, aligning with the broader tax compliance simplification.
Recalibration of the Arm’s Length Range: Under the existing TP regulations, India uses an arm’s length range between the 35 th and 65 th percentiles while determining arm’s length pricing. However, this range diverges from internationally accepted standards. To align India’s regulations with global norms, the expectation is to revise the range to an interquartile range, spanning from 25 th percentile to the 75 th percentile, which better reflects the true variability in arm’s length pricing.
Dispute Management and Resolution
Expedited Advance Pricing Agreement (APA) Process: The APA regime has been a powerful tool for Indian taxpayers looking to mitigate related-party transaction disputes and achieve certainty on their arm’s length pricing. While the APA program has been successful as compared to traditional dispute resolution routes delays in processing APA applications have resulted in a significant backlog. To enhance efficiency, we recommend streamlining the APA process by categorising applications based on their complexity. Complex cases could be allocated to more experienced teams, while simpler cases should be subject to shorter timelines for resolution. This bifurcation would enable faster conclusions, benefitting both the tax authorities and taxpayers.
Expansion and Re-evaluation of Safe Harbour Provisions: Plenty of small taxpayers have opted for the Safe Harbour regime in order to conclude their arm’s length pricing in a streamlined manner. However, the applicable benchmarks are typically higher in this regime as compared to available alternatives. While the small taxpayers do get to enjoy this benefit of convenience, the threshold restrictions in the Safe Harbour regime makes it inaccessible to the taxpayers with comparatively higher value of transactions, forcing them into complex dispute resolution processes. To make this regime more accessible, the Government may re-evaluate the Safe Harbour provisions by (a) increasing the transaction thresholds to cover a larger number of companies, and (b) adjusting the rates to be closer to actual comparable benchmarks, thereby encouraging broader adoption andreducing litigation risks.”
—–
Deepashree Shetty, Partner, Global Employer Services, Tax & Regulatory Services, BDO India
“The Budget announced in July 2024 brought limited changes for individual taxpayers, leaving many to hope that the upcoming Budget 2025 will deliver the much-needed tax relief to alleviate their financial pressures. There is a strong expectation that the government will focus on improving taxpayers’ savings by introducing reforms such as a unified tax regime and enhanced deductions.
The Dilemma of Old vs New Tax Regimes – The introduction of two tax regimes – Old Tax Regime (OTR) and New Tax Regime (NTR) – was intended to offer taxpayers flexibility, allowing them to choose the system that best suits their investments, savings habits, and preferences. However, the reality has been far more complex. Many taxpayers find themselves confused between the two regimes, often reassessing their choice not only during the year but also while filing their tax returns. In light of these complexities, the upcoming Budget should focus on simplifying the tax structure for individual taxpayers by consolidating the current dual regimes into a single, cohesive tax framework. While this shift may take time, it is anticipated that the OTR may eventually be phased out, with its abolition ideally scheduled for FY 2026-27 to provide ample time for taxpayers, employers, and financial institutions to adjust.
A Single, More Beneficial Tax Regime – Since the introduction of the NTR, the options for tax savings have been limited, making it essential to reconsider and amend the structure for the benefit of taxpayers. While the NTR is preferred as a streamlined tax system, it can be made even more effective by incorporating the following key changes:
Simplification of income tax slabs and rates:
Increasing the basic exemption limit of income from INR 3 lakhs to INR 5 lakhs
The differences between tax slabs are currently inconsistent at INR 2 lakhs or INR 3 lakhs. A more uniform approach is needed with consistent income gaps.
Introducing a new 25% tax rate slab will provide further tax relief for middle-income earners. The tax rates currently stand at 5%, 10%, 15%, 20% and 30%.
The income limit for the 30% should be enhanced from INR 15 lakhs to INR 20 lakhs.
Inclusion of popular deductions under the NTR:
Section 80C: Allow deductions up to INR 2 lakhs for life insurance premiums, employees’ Provident Fund contributions, etc.
Section 80D: Extend the deduction up to INR 1 lakh for health insurance premiums for self and family, addressing the growing burden of medical expenses.
Section 80TTB: Include a deduction of up to INR 50,000 for senior citizens earning interest from deposits with banks, post offices, etc.
10(13A): Allow salaried taxpayers to claim HRA deductions for rental expenditure under the NTR.
These proposed amendments will make the NTR not only simpler but also more tax-efficient”
—–
Santhosh Sivaraj, Partner, Global Employer Services, Tax & Regulatory Services, BDO India
Standard Deduction Limit – “With the well-awaited Budget 2025, the salaried individuals would be expecting some relief to the tax costs they bear on the salary income. With the introduction of the New Tax Regime in recent years, in the 2024 budget, the Hon’ble Finance Minister (FM) announced the allowability of an increased standard deduction of INR 75,000 per annum for those who opt for New Tax Regime as against INR 50,000 per annum who opt for Old Tax Regime. Standard deduction was abolished in the Financial Year (FY) 2005-06 and Late Hon’ble FM, Arun Jaitley reintroduced standard deduction in the 2018 budget.
As per the 2018 budget speech, the Late Hon’ble FM mentioned “To provide relief to salaried taxpayers, I propose to allow a standard deduction of INR `40,000/- instead of the present exemption regarding transport allowance and reimbursement of miscellaneous medical expenses….Apart from reducing paperwork and compliance, this will help middle-class employees even more in reducing their tax liability…”
While in Financial Year 2018-19, there were no two separate tax regimes, INR 40,000 was reintroduced as a standard deduction towards transport allowance and miscellaneous medical expenses. Owing to the inflation and increase in prices in both transport and medical since FY 2018-19 since the time standard deduction was reintroduced, the Hon’ble FM should look at bringing in parity for those opting for either the Old or the New Tax Regime and increase the standard deduction to a minimum of INR 1.20 lakhs a year. This would seem practical as any salaried taxpayer would be incurring INR 10,000 a month / INR 1.20 lakhs a year collectively towards transport and medical expenses.”
—-
Kunal Gala, Partner, Deal Value Creation, BDO India
“Digital infrastructure is likely to be a top priority in the Union Budget 2025, with continued investments being expected in projects like BharatNet to connect more than 6 lakh villages with high-speed broadband. Investments will also focus on expanding the 5G coverage which will be essential to enable the advancements in IoT, telemedicine, and smart city solutions. These will contribute to India’s digital transformation and bridge the rural-urban divide. To bolster this effort, subsidies for establishing data centers critical for cloud computing and AI-driven applications may be introduced which could attract global technology investments. It will also be crucial to implement robust cybersecurity frameworks and to ensure compliance with the Data Protection Bill to protect digital assets as India’s digital economy becomes more and more critical to its GDP growth”
Kunal Gala, Partner, Deal Value Creation, BDO India
“The Union Budget for the year FY26 is likely to face the double challenge of boosting up the economic growth and achieving fiscal consolidation. The GDP growth rate reduced to 5.4% in the second quarter of the financial year 2024-25 (against RBI projection of 6.8%) and the government has a fiscal deficit target of less than 4.5% of the GDP for the fiscal year 2025-26, so the spending priorities will have to be set properly. Corporate tax rates are not likely to be increased as India is looking to attract foreign capital, especially for large-scale projects. Investors remain cautious as Indian government bonds offer only ~ 2% higher yield than U.S. Treasury notes, reflecting limited risk-adjusted returns. Delaying the fiscal deficit target by a year to put more money into infrastructure and to satisfy the middle class could be a reasonable approach to turn around the economic growth and to create jobs.”
Kunal Gala, Partner, Deal Value Creation, BDO India
“With as few as 7% of the population i.e. about 75 million people, filing returns last year and 63% of return-filing individuals paying no tax, there is a systemic problem concerning compliance and income disclosure. Since a small group of high earners are responsible for most of the taxes, there is the need for reforms that not only simplify the tax code but also expand its base. The government is probably going to concentrate on making the system more inclusive and efficient, covering more of the population. Middle-class concerns such as compliance measures, tax complexity, and public services are critical to addressing the measures that need to be taken to keep a large population benefitted. A balanced approach is necessary to ensure sustainable revenue growth and reduce reliance on indirect taxes, which disproportionately impact lower-income groups.”
—-
Aakash Uppal, Partner & Leader (North & East), Corporate Tax, Tax and Regulatory Services, BDO India
Personal Income Tax: Under the existing tax regime, individuals with annual earnings up to INR 5 lakhs are exempt from paying taxes, while the new tax regime raises this threshold to INR 7 lakhs, aiming to provide more relief to taxpayers. The Government is expected to further enhance the new tax regime by increasing the basic exemption limit, adjusting tax slabs, and raising the standard deduction. Additionally, there is speculation that the Government may introduce a sunset clause for the old tax regime, gradually phasing it out in favor of the new system. These measures would make the new tax regime more taxpayer-friendly, encourage savings and investments, and support economic growth.
Concessional Tax Rate for Manufacturing Companies: In 2019, a concessional tax rate of 15% was announced for new manufacturing companies that began production on or before 31 March 2024. However, this relief was not extended by the Finance Act (No. 2), 2024. Currently, a tax rate of 25.17% (including surcharge and cess) is applicable for companies that could not benefit from the earlier concessional tax regime for manufacturing companies. The DTC may reintroduce this concessional tax rate to further support the government’s Make-in-India initiative, maintaining India’s appeal as a destination for new manufacturing investments. While the Production Linked Incentive offers some relief, an additional tax incentive would further bolster the sector’s growth.
Capital Gains Income: The DTC has simplified the categorization of assets for capital gains purposes, consolidating multiple holding periods into a single 24-month period, except for listed shares.. However, the holding period for new assets under section 54 of the Act remains at three years, which could be rationalized and brought down to 24 months. Moreover, there is a strong industry expectation that the exemption limit for Long-Term Capital Gains (LTCG) on equities, currently set at INR 1.25 lakh, may be increased to INR 2 lakh or higher, which would allow investors to retain a greater portion of their returns.
Aakash Uppal, Partner & Leader (North & East), Corporate Tax, Tax and Regulatory Services, BDO India
BEPS: Pillar Two: India is among the 140 countries that have signed on to the OECD’s Global Anti-Base Erosion Rules on Pillar Two. These rules are designed to prevent multinational groups from exploiting tax arbitrage by ensuring that they pay a minimum effective tax rate of 15% in every jurisdiction where they operate. Currently, around 30 countries which have implemented Pillar Two Rules in 2024, with another 30-35 countries expected to follow suit in 2025. While India has committed to the Pillar Two framework, it has taken a cautious approach by not incorporating it in previous budgets. Therefore, it will be crucial for the Government to clarify the application of Pillar Two in DTC and outline the reporting requirements in the upcoming Union Budget.
Simplification of Tax Filing and Reduction in Litigation Timeline: Filing tax returns for non-salaried taxpayers has become increasingly cumbersome due to the extensive information required in the forms. There is a strong need within the DTC to streamline these forms by simplifying the language and rationalizing the information requests. Additionally, under the Faceless Assessment Scheme, taxpayers face operational challenges such as the lack of grievance filing options, no provision for rectifications, and limited opportunities for early hearings with faceless Commissioners of Income Tax. These inefficiencies lead to protracted litigation and significant amounts of tax revenue being locked in disputes. The DTC should address these issues by introducing an operational framework to improve the functioning of the Faceless Assessment Scheme, thereby reducing the backlog of pending appeals.
Other Key Amendments: The DTC is also expected to bring about several other important changes. These include shifting to a calendar year for tax purposes instead of the financial year, simplifying the residential status for individuals by removing complex categories like ‘Resident but not Ordinary Resident’, introducing unified tax rates for domestic and foreign companies, and expanding the tax base for withholding taxes. Additionally, further rationalizing of withholding tax rates and provisions is anticipated.
