The Indian Finance Minister recently presented the Union Budget 2021 against the backdrop of a challenging economic environment due to COVID-19. In view of India’s tax reform measures to date, Budget 2021 maintains the same overall tax structure, but contains several measures that aim to attain tax certainty, facilitate tax administration, and reduce tax disputes. Multinational entities should analyze the impact of key Budget proposals on their operations, including a helpful provision to create a new board for advance rulings.
Ease of doing business remains a government priority. The Budget continues to encourage investments and contains plans for privatization of public sector undertakings and monetization of infrastructure assets.
This insight highlights key Budget 2021 tax proposals affecting foreign investors and multinational entities doing business in India. Budget proposals take effect once both houses of Parliament pass them and Presidential assent is accorded.