A new obstacle has come in the ongoing bullet train project to reduce the distance from Mumbai to Ahmedabad. After addressing the concerns related to land acquisition and environment, now the issue of income tax has arisen. In fact, Japan has raised questions about the income tax on the earnings of its engineers engaged in this project. Japan says this tax should not be imposed on consultants who are handling the design work of the bullet train project. According to the Indian Express report, Japan said that the Indian government should not levy income tax on the fees and other expenses received by these consultants. Not only this, if the issue is not resolved, it has also warned about the delay in the project.
Japan argues that income tax should not be levied on the income of its consultants. That too for working in that project in which a grant has also been given by the Government of Japan. Explain that the exemption of income tax has been withdrawn in the Finance Bill passed in 2022 and according to the new rule, consultants will also have to pay income tax from the current financial year. Two Japanese companies, Japan International Consultations and JE, have been given the task of designing the bullet train project. The demand for tax concession has been made by the Japanese government only to the employees working for these companies.
The Government of Japan has objected to clause 8, 8A, 8B and 9th clause of section 10 of the Income Tax Act of India. In this, the provisions of income tax on the earnings of foreign nationals working in India have been told. In fact, a loan has also been given to the Government of India from Japan for this project. On this, Japan argues that income tax should not be levied on the income of Japanese employees working in the project to be built from its own grant. It is worth noting that land acquisition for the bullet train project had also become an issue and after all the efforts of the government, the work on it has progressed.