There have been Buzz words and viral posts before the budget that income tax will be replaced by the expenditure tax, a new conception of direct tax in line with the prevailing social security taxes in the gulf nations notably in Saudi Arabia and UAE, where income tax in conventional mode not in vogue particularly the personal income tax and instead of personal income tax one has to pay social security tax for the general welfare of the society and nation in general. Nothing impossible for this present government which is bound to usher a new india by erasing all of the old regimes. So much so it’s eagerness to usher digital India that by two wisest acts in the previous budgets it invited serious troubles of revenue evasion in direct tax, one by introducing faceless assessment scheme which no country even higest digitalized countries dared to introduce because in income tax assessment or scrutiny indepth local knowledge about assessee and the business world is part and parcel since the queries in scrutiny U/S 142(1) can not be in a printed format as happening in present but an in-depth prior enquiries both by AO and his team of inspectors. As a result in most of the scrutiny cases major loopholes are not addressed and state is being highly deprived of its legitimate shares of direct tax particularly in such hard times. Secondly in direct tax most potent arsenal on the part of revenue is section 147 which helped the state even before independence time to tap huge black money and mitigated budget deficit. But wise men in North block by introducing 148A has suo moto destroyed this most potent arsenal of revenue just like if india self destroy the AGNI missile. Thereafter these wise fellows shot up thousands of 148 notices by force of a ludicrous circular knowing well that this foolish circular will fall flat before any court of law and is happening so with full swings. And now it will not be surprising that these wise mandarins in North Block will undertake the final venture to bury the income tax by introducing expenditure tax by following those countries whose huge costly natural resources restrained them to impose personal income tax since these countries are super rich by selling oil. Now present government obviously is considering india as per these nations as a super rich and may gladly follow them because india is Saudi Arabia or Quatar or Dubai now on dream economy of these day dreamers.

Some Issues in Union Budget on Direct Tax 2022

Now it will be pertinent to look after the practical implications of these wisest steps one by one on point wise basis for easy understanding:

1 in total revenue collection of the central government Direct tax or income tax share is 56%, GST 28% and balance are from customs and ors. But due to COVID direct tax collection has shrunk to as low as 27% now. So after this budget it will be Nil if income tax is replaced. But we should not worry since digital India is now super rich like Saudi, Quatar, UAE, OMAN. So it will not effect us by losing source of more than 50% direct and easy revenue.

2 government will now if require some revenue to run the country will collect from GST by trpling the price of essential goods and people will happily pay.

Some Issues in Union Budget on Direct Tax 2022

3 this sincere efforts in last few years by this wise government has already put india in the most danger zone of high income equalities, unemployment and debt trap to such extent that even the surplus savings of RBI is being eaten up by the government and it is natural so because this revolutionary government does not want to pain the people with income tax.

4 these wise magay in ruler seats has either forgotten or willfully forgotten that it is most childish talk or thinking to do away in ome tax. Why? Firstly it is only one subject in the world which is not a just mere tax collection law or machine but a science forming core of all financial activities not only in domestic segments but also in international segments too thus all financial relationships with the external world are dependent on income tax science. Not much words needed to be spared in support of my contention but mere perusal of income tax act and following the agendas of crucial economic meetings in abroad like G-20, G-7, Davos will surprise one to see that every economic issue including recent OSED are all nothing but income tax. It is lord of the financial world. A single government or ministry is just like a boat in Pacific.

Secondly, ineffective income tax machinery means aggravating more the burning problem of income inequality which is most deadly incendiary for a nation. History teaches us so from October revolution and French revolution. Income tax is the only instrument in the hands of state to combat this deadly seething fire that can burn a nation any time by social revolution. So God knows what is waiting in our faith by playing fire with an most powerful atom bomb in the universe. 

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Qualification: LL.B / Advocate
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Location: BURDWAN, West Bengal, India
Member Since: 28 Oct 2021 | Total Posts: 6
PRACTISING AS A SENIOR ADVOCATE IN HONBLE ITAT, KOLKATA FOR LAS 19 YEARS STEADILY. BEFORE IT WAS IN DELHI HIGHCOURT AND ITAT, DELHI. EX LECTURER OF DEPT. OF LAW, UNIVERSITY OF BURDWAN. View Full Profile

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3 Comments

  1. Ravinder Singh says:

    Faceless assessment is very revolutionary idea taken by this Government to curb corruption which is far rooted in the Income Tax department for last 70 years of independence, and we can feel your real pain in writing this article being a lawyer in ITAT. As per your understanding we should always follow the decision of other countries and should not try to take any decision unless it is taken by any other county in the world. Why can’t we taken any decision as per the situation of our country. Have you seen the no. of income returns filed before 2014 and in 2021, this is because so many decision taken by the government to plug in the loop holes created in the system by the previous government, so be ready for such decision in future also as change is the law of nature

  2. Tiru C Narayan says:

    These good points can be incorporated in the suggested tax idea of getting rid of income tax and replacing with sales tax (I am using sales tax as a synonym to expenditure tax).

    About time we change the age-old income tax.

  3. Vijay Kumar Dadoo says:

    Kindly let me know the source of the present Direct Tax Collection to the level of 27% of the total Revenue Collection. Kindly let us know the no. of Income Tax Payers, AY 21-22. Kindly also let us know the No. of Seniors Paying Income Tax ? This figure is never posted by the Government. As far as I know, there are Salaried Tax Payers, Senior Tax Payers, and falling no. of Tax Payers 18-60 age .

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