The Finance Bill 2018, passed by the Lok Sabha on Wednesday without discussion, has streamlined tax breaks for start-ups and exempted foreign companies from having to quote a permanent account number (PAN).
Unlike previous finance bills, there are no significant changes, with the government deciding not to roll back any of the tax provisions, including the controversial levy of LTCG tax at the rate of 10% on the sale of listed shares. However, some minor relief has been given in terms of allowing indexation benefits for unlisted shares in certain tax-neutral transfers like inheritance, demergers and amalgamation. Indexation benefits allow the owner of shares to raise the cost of acquisition and consequently reduce capital gains.
The finance bill will now go to the Rajya Sabha. However, since it is a money bill, the Upper House can only suggest changes to it which may or may not be accepted by the Lok Sabha. Both Houses of Parliament have seen repeated adjournments with the opposition protesting against various issues, including the passage of the budget without debate and scams in the banking sector.
Analysts said that the changes could give a boost to Start-up India and improve the ease of doing business for foreign companies in India.
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