While the new government needs to take many steps to restore investor's confidence, here are five things on the income-tax front that merit their immediate attention.

1. Certainty in tax policy is the hall mark of any matured economy. In general, the businesses want to pay tax and comply with the law of the land; however, what bothers them is the huge uncertainty in the Indian tax system especially the retrospective changes in tax law. It is imperative that tax policy, as is understood and interpreted at a particular point in time is respected and changes, if any, are brought only prospectively, barring few exceptions.

2. Transfer Pricing disputes have become a huge burden for the foreign companies. No doubt, government needs to collect its due taxes, however, there is surely something wrong when almost every large foreign company is entangled into multi-million dollar tax disputes. This is a serious concern and needs to be addressed.

3. Clarity on new rules: Many of the recent changes in the tax law require clarity. A case in point is taxability arising on indirect transfer of shares, if the 'substantial value' of assets is situated in India. Now, what constitutes 'substantial value' has not been clarified. Like this, there are many other tax provisions that require clarity.

4. Compliance requirements for foreign companies for payments received from India like Royalty etc. needs re-consideration. The current compliance provisions like obtaining a Tax Residency Certificate from foreign tax authorities, PAN etc. have not only increased the cost of compliance; but have also increased the overall cost of doing business with / in India.

5. Widen the tax base: Instead of merely focusing on the miniscule percentage of companies/population that file's its tax return and pays tax. The focus should be to widen the tax base and bring in larger section of the society in the tax net.