Govt proposes to abolish Equalisation Levy on on-line commercials

The federal government on Monday (March 24, 2025) proposed to abolish the Equalisation Levy or digital tax on on-line commercials as a part of the 59 amendments to the Finance Invoice 2025, which is being debated within the Lok Sabha.

The proposal to take away the Equalisation Levy on on-line commercials, in accordance with specialists, is aimed toward exhibiting an accommodative stance to the U.S., which has threatened to introduce reciprocal tariffs from April 2.

The Equalisation Levy was imposed on on-line commercial companies on June 1, 2016.

The amendments to Finance Invoice 2025 have been launched within the Lok Sabha by Minister of State for Finance Pankaj Chaudhary

.Final yr, the federal government already eliminated a 2% Equalisation Levy on e-commerce transactions, however the 6% levy on on-line commercials continued.

“Though the two per cent levy garnered extra criticism from the US, in anticipation of extra tariff retaliation by them, the federal government is attempting to point out a extra accommodative stance, and the removing of 6 per cent Equalisation Levy on internet marketing is a step in that course. Nonetheless, it stays to be seen if this step, coupled with already ongoing diplomatic measures, would result in any softening of stance by the US,” AKM International Tax Accomplice Amit Maheshwari stated.

Nangia Andersen LLP Accomplice Vishwas Panjiar stated the federal government’s transfer to suggest the abolition of the Equalisation Levy altogether is a step in the proper course, because it not solely brings certainty to taxpayers but additionally addresses the issues raised by companion nations (just like the US) concerning the unilateral nature of the levy.

Apart from, the removing of the Equalisation Levy, the federal government has additionally proposed amendments to make offshore fund investments much less onerous and got here out with modifications referring to tax assessments below search and seizure provisions and reconciliation of revenue tax returns.

“A number of amendments have been made to provisions associated to look and seizure evaluation… The federal government has added the brand new time period Whole Undisclosed Revenue to make clear that the intent of search and seizure proceedings is to deliver solely undisclosed revenue to tax,” Mr. Maheshwari stated.

Deloitte India Accomplice Anil Talreja stated the proposed amendments to the Finance Invoice 2025 are largely clarificatory in nature. These are consistent with the mission of the federal government to deal with doubts and points being confronted by the taxpayers and companies at massive.