ICAI seeks measures to mitigate litigation, prevent tax avoidance in pre-Budget suggestions

New Delhi, Nov 3 (PTI) Seeking prudent tax reforms for facilitating the ease of doing business, chartered accountants' apex body ICAI on Monday suggested various measures in the Union Budget 2026-27 to mitigate litigation, reduce compliance burden and prevent tax avoidance.

The ICAI has proposed exclusion of F&O trading and speculation business from the scope of presumptive income, introduction of optional joint taxation of married couples and requirements for audit of accounts in all provisions providing for profit-linked tax deductions and mandatory return filing by persons owning more than specified acres of agricultural land.

In its pre-Budget suggestions, the Institute of Chartered Accountants of India (ICAI) has also suggested introduction of year-wise E-Ledger system for crediting TDS (Tax Deduction at Source)/ TCS (Tax Collection at Source) and advance tax payments which can be adjusted against the income-tax due, Another suggestion is exemption from the requirement of obtaining TAN (Tax Deduction and Collection Account Number) in the case of a transferee responsible for paying to a non-resident transferor, and also removal of TCS on sale of scrap.

In a release, the ICAI said the suggestions are for having prudent tax reforms aimed at facilitating ease of doing business and encouraging environmental sustainability.

The institute has suggested that tax neutral status be extended to business reorganisation in LLPs (Limited Liability Partnerships), TDS on partners remuneration be rationalised and incentives be given for promoting green projects.

Other suggestions include clarification of applicable rate of surcharge for calculation of Maximum Marginal Rate (MMR), decriminalisation of certain prosecution provisions, removal of dual penalty for the same default, and processing of returns to be limited to addressing arithmetical errors and prima facie incorrect claims.

"Through our pre-Budget Suggestions for 2026–27, we aim to support a tax ecosystem that promotes ease of doing business, drives sustainable growth and strengthens India's journey towards a resilient and green economy," ICAI President Charanjot Singh Nanda said.

Generally, the Union Budget is presented in Parliament on February 1 every year. PTI RAM ANU ANU