A chartered accountants’ body has raised concerns over several tax proposals in the Finance Bill, including changes affecting Sovereign Gold Bonds (SGBs), dividend taxation and withholding rules, saying that some provisions could disrupt investors and businesses if implemented without tweaks.
In its post-Budget representation to the Finance Ministry, the Bombay Chartered Accountants’ Society (BCAS) said the proposed tax treatment of SGBs bought in the secondary market could unsettle investors who had expected tax-free redemption.
“Withdrawal of capital gains exemption on such bonds purchased in the secondary market adversely impacts those investors who already invested in them on the promise of getting tax-free redemptions,” the body said in its memorandum.
BCAS suggested that the change should apply only to bonds issued after February 1, 2026 to protect existing investors.
The society also raised concerns over the proposal to disallow interest deductions against dividend income. According to it, the move could hit sectors such as infrastructure, real estate and financial services where investments are often structured through holding companies or SPVs.
“The amendment will lead to loss of interest payment in case of borrowed funds utilised for investment purposes,” the representation said, adding that it could raise borrowing costs and make some projects commercially unviable.
Among other recommendations, BCAS called for rationalising tax deduction at source (TDS) rates between professional and technical services to reduce disputes and compliance burdens. It also urged the government to ease certain prosecution provisions for tax lapses and address drafting anomalies in immunity provisions.
The memorandum forms part of industry feedback to the government after the presentation of the Union Budget, with stakeholders seeking adjustments before the Finance Bill is finalised in Parliament.
Published on March 2, 2026