Budget 2027-28: FICCI Seeks LTCG Tax Relief, TDS Reforms And Faster Tax Appeals

(MENAFN- KNN India) New Delhi, Nov 7 (KNN) Industry body FICCI has urged the government to restore the long-term capital gains (LTCG) tax exemption on listed shares and simplify tax compliance in its recommendations for the Union Budget 2027-28.

Its proposals to Finance Minister Nirmala Sitharaman also cover tax appeals, foreign company taxation, merger-related losses and customs assessments.

Citing FPI outflows of around Rs 3.08 lakh crore, FICCI said capital gains tax alongside securities transaction tax (STT) reduces post-tax returns and India's investment attractiveness.

LTCG and TDS Reforms

FICCI has proposed restoring the LTCG exemption withdrawn in 2018, allowing higher STT on delivery trades if needed, and ensuring 10-year tax stability. It also wants foreign investors to calculate capital gains in their investment currency to account for exchange-rate movements.

Since July 23, 2024, short-term and long-term gains on listed equity have been taxed at 20 per cent and 12.5 per cent, respectively, with an LTCG exemption limit of Rs 1.25 lakh.

The chamber has sought exemption from 0.1 per cent TDS on goods purchases and e-commerce transactions for B2B payments to GST-registered suppliers.

A FICCI survey found TDS mismatches between returns, Form 26AS/AIS and books of accounts at 70 per cent of corporate groups and 49 per cent of single entities. It wants PAN- and invoice-level tax-credit details, a reconciliation tool and discontinuation of routine TDS/TCS certificates where credits are available electronically, except for salaried employees, non-residents needing foreign tax credit, individuals without PAN and those requesting certificates.

Appeals and Tax Certainty

Over 50 per cent of survey respondents reported appeals pending beyond two years, 63 per cent faced rectification difficulties and nearly 60 per cent reported delays in Orders Giving Effect. FICCI cited 45–50 per cent vacancies at the Commissioner (Appeals) and Joint Commissioner (Appeals) levels.

It has proposed filling vacancies, creating a dedicated faceless appeals cadre and publishing monthly performance data. It also wants a full stay on demands, suspension of refund recovery and interest waiver for delays beyond two years not attributable to taxpayers, along with digitised stay orders, a portal upload limit of at least 50 MB against the current 5 MB, and issue-specific notices.

Customs Reforms

FICCI has sought automatic finalisation of provisional customs assessments pending beyond two years under Section 18 of the Customs Act, risk-based valuation, limits on Special Valuation Branch referrals and a searchable portal for current trade notices and customs instructions.

The chamber said the proposals would reduce compliance costs, improve tax certainty and ease working-capital pressures.

(KNN Bureau)

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