In its pre-Budget recommendations to the finance ministry, CII has suggested that the government should look to create an ‘Investment Budget’ to enable an economic recovery and feels the rationalisation of tax for banks, NBFCs and VCs will be key to this revival. CII has recommended that tax pass through status for all venture capital funds registered with Sebi be reinstated, and the availability of long-term finance for industrial, agricultural or infrastructural facilities be boosted. It has also advocated treating the derivative trading activities undertaken by banks and financial institutions on a par with other business activities for the purpose of the Income Tax Act.

To reduce the voluminous processing of forms by the IT department and ensuring that the tax benefit is received by banks despite of non-receipt of TDS certificates from borrowers/customers, banks should be granted exemption from TDS under Section 196. CII has also suggested that the IT Act should clearly spell out the allowance of depreciation to the lessor at the prescribed rates in respect of leased assets.