Income-Tax Law Has Been Made More and More Complicated In Every Budget
Mr. Modi Govt. in Budget 2017 has made the Income-Tax law more complicated. On One side Income-Tax Deptt. says that only assesses e-mail address should be provided to enable them to file returns voluntarily. On the other hand, CBDT amending Income-Tax law in such a way that compliance of return filing would be possible only by or through Super Specialist in Income-Tax law. There is no correlation between intent and action of Central Board of Direct Taxes. Simplification of Income-Tax law and Citizen Charter are only guise.
Income-Tax is a direct tax, paid out of the pocket of the assessee. Whereas Indirect tax is a collected tax & the assessee act in fiduciary capacity. Govt. definitely cannot take stringent policy decisions for assessment, inspection, levy & recovery of direct tax in the lines of Indirect taxes. Indian Income-Tax law become one of the most complicated Direct Tax law in the world. This is evident on comparing the latest size of the statute book of Income-Tax Act with that published in 1962.
Three draconian proposals in Union Budget-2017, which Businesses man should be worried about are as follows :-
(1) Freedom to Govt officials to “Search/Survey” with no accountability/Change Retrospective from 1962… all cases in pipe line :-
Section 132 and 132A amended that “the ‘reason to believe’ or ‘reason to suspect’, as the case may be, shall not be disclosed to any person or any authority or the Appellate Tribunal.” This is by far the most harsh and bizarre change.It was a settled law that you cannot do any survey till you have any reasons to believe there is something bad against the revenue. The income tax officers should NOT just disturb anybody on mere suspicion, or any anguish, personal or officials, out of their one-sided sweet will. If this amendment is allowed, it may lead to virtual “Taxman’s Terror”. The law has been changed retrospectively since 1962 !!!. That is compromising the cases which are subjudice currently
(2) Freedom to ITO, to Attach properties during survey :-
Section 132(9B) added. If during survey the ITO feels it is important, then he can take permission of the Director General and attach any property for the realization of the tax.
Already reason need not be disclosed, as shared above in Point No.1. And now with rights of “provisional attachment:” …. The things could go out of hand, if checks and balances are not kept in tune. If allowed to go this way, it may lead to “Taxman’s Terror”.
(3) Freedom to ITO, to reopen cases up to 10 years old :-
For more than a decade the settled law was that in case of Survey, maximum 6 old years can be re-opened. Prior to that was sealed. Now, they have taken option to reopen up to 10 years.
These three harsh changes shall be w.e.f. 1st April 2017, after the passage of Finance Bill and notification. We need to take up these issues with the government to ensure a system of accountability, checks and balances for IT department so as not to unleash unnecessary and avoidable harassment and terror.
Spread the awareness to all citizens of India
Viewers are welcome to comment other Provisions in Budget 2017 which in their opinion will spread the Tax Terrorism among the Tax Payers.
B.S.K.RAO, Tax Advocate, BDKRAO, Beside SBI, Tilak Nagar, Shimoga-577201, Karnataka State
Mo.No. : 9035089036
E-Mail : raoshimoga@gmail.com
Click here to Read Other Articles of B.S.K.RAO
Click here to Read more On Union Budget Circular
Tax Policy Heads in CBDT have no knowledge about cannons of taxation to be followed by law frame
Original Income-Tax Act, 1961 was well drafted by learned officials in Finance Ministry & it was capable of meeting the expectation of the Govt. in all future events, except requiring amendments for events/changes taking place in this 21st Century. India Central Budget 2017 has made the Income-Tax law still more complicated. One side Income-Tax Deptt. says that only assesses e-mail address should be provided to enable them to file returns voluntarily. On the other hand, CBDT amending Income-Tax law in such a way that compliance of return filing should be given through Super Specialist in Income-Tax law. There is no correlation between intent and action of Central Board of Direct Taxes. Simplification of Income-Tax law and Citizen Charter are only guise. Income-Tax is a direct tax, paid out of the pocket of assessee. Whereas Indirect tax is a collected tax & the assessee act in fiduciary capacity. Govt. definitely cannot take stringent policy decisions for assessment, inspection, levy & recovery of direct tax in the lines of Indirect taxes. Indian Income-Tax law has become one of the most complicated direct tax law in the world. This is evident on comparing the latest size of the statute book of Income-Tax Act with that published in 1962. Therefore, it is prayed before the Prime Minister & also Minister for Public Grievances to scrap Central Board of Direct Taxes with immediate effect.
PRAYED BEFORE MINISTRY OF FINANCE, GOVT. OF INDIA TO SCRAP CBDT TO AVOID FURTHER TINKERING TO INCOME-TAX LAW
Restrictions & complications built in the present Income-Tax law does not encourage assesses to file returns voluntarily, rather it encourage assesses to hide turnover & income from taxation.
NOW ASSESSING OFFICERS CAN ENTER THE HOUSE OF ANY PERSON WHILE MOVING ON THE ROAD JUST TO FULFILL THEIR GRUDGE AND NO ONE CAN QUESTION IT – YAHI HI MODI KA ACHHA DIN – NOW MODI IS UNDER THE CONTROL OF IAS/IRS (LAW FRAMERS) WHO SIT IN AC ROOM & DO NOT UNDERSTAND THE PROBLEMS AT GROSS ROOT LEVEL
Govt. should remember that quantum of Tax Collection under Income-Tax law is vested in the hands of Tax Professionals & not with the policy maker. If policy framed are too stringent & against the practical situation of business, such transactions has to be excluded from declaration to avoid penalty & disallowance in the assessment process & can not be traced by the Deptt. in the course of Audit prescribed in the statute book.
CBDT should simplify the Income-Tax law & encourage all five class of Tax Professionals to participate in policy making process & support voluntary compliance, so that Tax Professionals feel contributing to the Govt. exchequer. If CBDT act against to the intent of Tax Professionals, they tend towards avoiding tax to Govt. exchequer. This is the reality of the situation prevailing in India.
Earlier small assesses were filing returns once in two years for getting refund of tax deducted at source for the purpose of making small investments in household article out of such refunds. As the the time limit for claiming such refund has been reduced from 24 Months to 12 Months in Budget 2016, now they can not make such legitimate claim of refund. In the previous budget, Govt. reduced the time limit of 24 Months to 12 Months with the intent to eataway small people money. This is also one of the example for Tax Terrorism made in Budget 2016 by Mr.Modi Govt.. All big assesees file return regularly & get their refunds promptly.
Income-Tax is a direct tax, paid out of the pocket of the assessee. Whereas Indirect tax is a collected tax & the assessee act in fiduciary capacity. Govt. definitely cannot take stringent policy decisions for assessment, inspection, levy & recovery of direct tax in the lines of Indirect taxes. This is the theme of the article that every one should agree.
I presume that Tax Professionals are not commenting to the above article for the genuine reason that more complicated the tax law more scope to Tax Professionals. Tax Professionals are under the control of policy makers or vice versa !
Yes under the name of simplicity one sided amendments are made to simplify the tax collection machinery which is only from depts angle.
Majority of amendments are not to hide failuer of depts machinery.
Income tax act is simply to tax on income but amendments are questionable.
How act define income where as actual income is different?
Soneka anda denivali murgi katna chahta hai department