Indian Equity Market Faces Turbulence Amid Rising Uncertainty

The Indian equity market has been experiencing significant volatility, with sharp fluctuations in benchmark indices and sectoral indices. This turbulence is being driven by multiple global and domestic factors that are creating an uncertain investment environment.

Key Factors Driving Market Volatility

Several factors have contributed to the instability in the Indian equity market:

• Geopolitical Uncertainty: Ongoing global conflicts and political tensions have unsettled investors.
• Rising Crude Oil Prices: Increasing oil prices impact inflation and corporate margins, affecting overall market sentiment.
• Heavy Selling by Foreign Institutional Investors (FIIs): FIIs have been aggressively selling Indian stocks, adding pressure on indices.
• Fears of a Global Recession: Concerns over an economic slowdown worldwide have led to cautious market behavior.

CBDT Seeks Stakeholder Input on New Income Tax Bill, 2025

Amid economic challenges, the Central Board of Direct Taxes (CBDT) has invited stakeholders to submit their suggestions on the new Income Tax Bill, 2025. The feedback will be compiled and reviewed by a select committee of Parliament.

Objective of the Initiative

The CBDT aims to simplify income tax rules and forms while ensuring greater clarity and efficiency in tax compliance. Key goals include:

• Enhancing transparency in taxation processes
• Reducing compliance burdens for individuals and businesses
• Eliminating obsolete tax rules to modernize tax administration
• Streamlining tax forms to ease filing and minimize errors

Parliamentary Panel’s Call for Stakeholder Suggestions

The select committee has opened four key areas for stakeholder input:

1. Simplification of language – Ensuring tax laws are easy to understand and interpret.
2. Reduction of litigation – Addressing complexities that lead to disputes and prolonged cases.
3. Lowering compliance burdens – Minimizing bureaucratic hurdles for taxpayers.
4. Identification of redundant rules – Removing outdated provisions to improve tax efficiency.

Experts’ Take on the New Tax Bill

Tax experts believe that engaging with stakeholders will help fine-tune the bill and address practical concerns. They emphasize the importance of well-structured tax rules that align with legislative intent while simplifying compliance.

• Samir Kanabar, Tax Partner, EY India, stated that providing clear examples and illustrations can enhance taxpayer understanding and reduce litigation.
• Gouri Puri, Partner, Shardul Amarchand Mangaldas & Co, highlighted the need to address overlooked aspects, such as extending the rule against cascading taxation on dividends to all companies claiming a concessional corporate tax rate of 22%.
• Sumit Singhania, Partner, Deloitte India, emphasized simplifying administrative rules and ensuring documentation requirements remain manageable for taxpayers.

FAQs

1. Why is the government seeking public input on the new tax bill?
The initiative aims to simplify tax compliance, reduce litigation, and modernize tax laws to align with current economic realities.

2. Who can submit suggestions for the new tax bill?
Taxpayers, businesses, legal professionals, and industry experts can provide their input to the select committee.

3. How will the new bill impact taxpayers?
The proposed changes aim to make tax filing easier, eliminate outdated provisions, and ensure smoother compliance processes.

4. What happens after the stakeholder suggestions are collected?
The select committee will review the suggestions and incorporate relevant changes before finalizing the bill for parliamentary approval.

Conclusion

While the Indian equity market remains volatile, the government’s move to streamline the taxation system could provide much-needed clarity and stability for investors and taxpayers. Stakeholder engagement in the Income Tax Bill, 2025, represents a crucial step toward creating a more efficient and transparent tax framework.