The banking sector is in flux following the demonetisation policy of the Centre. The Federation of Indian Chambers of Commerce has following suggestions to the ease the sector’s problems from the Union Budget of 2017-18.
• The limit of 27% prescribed under Rule 87 of the Income Tax Act in respect of employer’s contribution to a fund should be done away with for entities administering defined benefit schemes of pension
• TDS on the income of banks cause considerable inconvenience in view of huge volumes of TDS certificates to be collected by banks so they should be granted exemption from TDS under section 196 of the Act
• Section 194IA of the Income Tax Act requires tax to be deducted by a transferee responsible for paying for transfer of immovable property. Exemption should be provided in cases where transfer is made by banks of properties in cases where the owner is the borrower of the bank and the bank is selling such property to recover its dues
• Exemptions on taxes related to bad or doubtful debts should be extended to non-performing investments as well
• Amend the law to set a time limit for special investment schemes for industrial, agriculture and infrastructure development in India to stop people avoiding tax to park their money in perpetuity in these schemes
• Increase the threshold limit of exemption for TDS on interest on securities from Rs. 10,000 to Rs. 100,000
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