Original Income-Tax Act, 1961 was well drafted by learned officials in Finance Ministry and it was capable of meeting the expectation of the Govt. in all future events, except requiring amendments for events and 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 by approaching more than one Tax Professional with their Digital Signature Certificates, who are considered as Super Specialist in Income-Tax law. Cause & effect of complicated Income-Tax law is as under:-
(1) It has become very difficult for Tax Professionals to follow-up the amendments made to Income-Tax law in every budget to support voluntary compliance.
(2) Deptt. officials are using the complicated Income-Tax law as tool for harassment in the course of assessment proceedings
(3) On looking at amendment made in every budget, it is evident that there is no correlation between intent and action of Central Board of Direct Taxes
(4) Scrutiny assessments are concluded by assessing officers keeping in mind that some additions has to be made, if not higher officers will doubt about their work.
(5) Slogan of Income-Tax Deptt. “Simplification of Income-Tax law and Citizen Charter” published in the wall post of Income-Tax Deptt. are only guise.
Canons of Good Tax System:-
The characteristics or qualities of good tax system have been described below as canons of taxation. Taxes should be collected by the Govt. like plucking flower without affecting the whole flowering plant.
(1) Canon of equality and equity
Taxation must ensure justice & the burden of tax must be distributed equally based on the ability of tax payer.
(2) Canon of Certainty
Tax payable by person should be certain and not arbitrary-Presumptive taxation not permissible.
(3) Canon of Economy
Complex & ever changing nature of tax law in India require highly trained personnel involving high administrative cost and inordinate delay in assessment and collection of taxes
(4) Canon of Convenience
Tax should be collected in convenient manner. There should be simple process of payment of tax when it is deducted at source. In India TDS payment is not convenient for the reason that middle man interference is required to appropriate the tax to particular PAN A/c
Ex:- Only in case of TDS on property sale is convenient for the reason tax deducted is directly appropriated to respective PAN A/c
(5) Canon of Elasticity
Taxation should elastic, more revenue automatically fetched when income of person rises, ie, it should have built-in flexibility.
(6) Canon of Productivity
Tax must yield sufficient revenue collection & should not adversely affect economic production.
(7) Canon of Simplicity
Tax law should be simple & should not go beyond the understanding of layman. This is what lacking in Indian Income-Tax law.
(8) Canon of Diversity
In multiple tax system, tax payer will not be burdened with high incidence of tax in aggregate. This may not be in vogue due to implementation of GST in India. Very purpose of GST is to have single Indirect Tax System in India.
(9) Canon of Expediency
Levying tax on agricultural income lacks social, political or administrative expediency in India & hence Govt. of India cannot tax agricultural income
B.S.K.RAO, Tax Advocate, BDKRAO, Beside SBI, Tilak Nagar, Shimoga-577201, Karnataka State
Mo.No. : 9035089036
E-Mail : firstname.lastname@example.org