Examine the rationale for introducing a presumptive taxation regime for foreign investors. Assess its likely impact on India’s ease of doing business and foreign direct investment flows. Also propose measures to enhance predictability and stability in India’s international tax regime.
Kartavya Desk Staff
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment
Q5. Examine the rationale for introducing a presumptive taxation regime for foreign investors. Assess its likely impact on India’s ease of doing business and foreign direct investment flows. Also propose measures to enhance predictability and stability in India’s international tax regime. (15 M)
Difficulty Level: Medium
Reference: TH
Why the question: Niti Aayog pitches for presumptive taxation scheme for foreign investors Key Demand of the question: Explain the economic rationale behind presumptive taxation for foreign investors, analyse its potential impact on India’s ease of doing business and FDI inflows, and propose measures to make India’s international tax system more stable and predictable. Structure of the Answer: Introduction: Define presumptive taxation and link it with India’s broader tax reform goals for FDI attraction. Body: Explain rationale behind introducing presumptive taxation (tax certainty, simplification, litigation reduction). Assess likely impact on India’s investment climate and ease of doing business. Suggest institutional reforms for predictable, transparent, and stable international tax governance. Conclusion: Conclude with how a certainty-oriented, globally aligned tax regime can strengthen India’s position as a competitive and trusted investment destination.
Why the question: Niti Aayog pitches for presumptive taxation scheme for foreign investors
Key Demand of the question: Explain the economic rationale behind presumptive taxation for foreign investors, analyse its potential impact on India’s ease of doing business and FDI inflows, and propose measures to make India’s international tax system more stable and predictable.
Structure of the Answer:
Introduction: Define presumptive taxation and link it with India’s broader tax reform goals for FDI attraction.
• Explain rationale behind introducing presumptive taxation (tax certainty, simplification, litigation reduction).
• Assess likely impact on India’s investment climate and ease of doing business.
• Suggest institutional reforms for predictable, transparent, and stable international tax governance.
Conclusion: Conclude with how a certainty-oriented, globally aligned tax regime can strengthen India’s position as a competitive and trusted investment destination.