This representation offers several suggestions to simplify the Income Tax Act and provide relief to taxpayers. Key recommendations include restoring deductions under sections 80C and 80G to promote savings and support genuine trusts. A reduction of the Tax Collected at Source (TCS) rate to 1% is proposed, citing its original intent as a reporting mechanism rather than a revenue-generating tool. Concerns over reopening completed cases and unrealistic assessments by the NFCAC (National Faceless Assessment Centre) are raised, calling for thorough reviews and better monitoring. Additionally, the representation advocates for extending marginal relief to Old Tax Regime (OTR) filers, allowing choice between tax regimes for belated returns, and ensuring timely disposal of rectification petitions with automatic stays. Further suggestions include raising basic tax exemptions, extending partner salary benefits under presumptive taxation, adopting a flat 15% tax rate, and removing surcharge at all levels. Lastly, compensation is recommended for those facing unfair assessments to alleviate taxpayer stress. These measures aim to create a more equitable and efficient tax system.
1. Deduction u s 80 C is to be restored to make the people, who are in unorganised sector (including the CAs) to save for their future by investing in LIC, NPS, Bank etc., Because of withdrawal of benefits associated with Bank Deposits (80C) and Bank Interest (80TTA 80TTB) the Bank Deposits are going down for which the Governer of RBI expressed his concern.
2. Deduction u s 80G is to be restored so that the genuine Trusts can survive.
3. TCS should be 1% only. It is meant for the department to know of the transactions that happened during the year so that whether a particular assessee is disclosing them in their ROI or not. But now it is used as collecting undue taxes because as of now the maximum rate for foreign travel is 20%. It is an unnecessary burden on them who are ultimately going to get it as a refund.
4. Time spent on reopening the completed cases can be spent on roping in new cases.
5. NFCAC is passing unrealistic high pitched assessment orders. A high level committee should be formed with CAs as part of it to thoroughly go through the orders and fate of them and suggest measures for better functioning.
6. Likewise the Faceless CIT (Appeals) orders should also be monitored so as to avoid baseless orders passed by them.
7. As per the Finance Act 2024 Gift by anyone other than Individual or HUF will be subject to Capital Gains Tax. In this Trusts should be allowed to give gifts (Donation)
8. Marginal Relief, which is now available for NTR should be given to OTR also.
9. It is not fair to compel the assessees to file under NTR only if they file belated returns. They should be given freedom to choose OTR, if they wish.
10. Rectification Petitions should be disposed of within 30 days and till the disposal of the petition, automatic stay should be granted. If the orders are disputed in appeals 20% of the demand should be paid and stay should be granted for the balance 80%, till they are confirmed in appeals
11. Remove relief u s 87A and increase the basic exemption to Rs. 5 lakhs for individuals less than 60 years of age, to Rs. 8 lakhs to 60 years to 80 years of age and Rs. 10 lakhs to 80 years and above of age.
12. Under Presumptive Tax, interest to partners @ 12% and Partners’ salary allowable u s 40(b), which is now available u s 44AE is to be extended to 44AD also.
13. Instead of PROGRESSIVE TAXATION, UNIFORM TAXATION can be introduced by taxing at the flat rate of 15% for individuals for income above Rs 5 lakhs, for senior citizens (60 to 80 age) for income above Rs 8 lakhs and for super seniors (80+ age) for income above Rs 10 lakhs.
14. Surcharge should be removed at all levels.
15. In order to reduce the unreasonably high-pitched assessments the assessee should be given 20% of the demand if they are cancelled at the final stage as compensation for the mental agony, he had undergone in filing appeals.
16. As of now the orders are being sent to the registered email id of the assessee as well as to the secondary email id also. But it happens that either the assessee fails to check the email on a daily basis, or the order is not sent to the registered email ids and there is no full proof mechanism to prove that the email was sent or not or received by the assessee or not. Because of the communication gap the assessee is not aware of the order passed and the demand raised, which he comes to know of the order passed while the refund of the subsequent year is adjusted to the existing demand. By the time the assessee comes to know of the order and demand the time for filing appeal or rectification petition is elapsed and he has to file an appeal with condonation petition, which may not be entertained by the appellate authorities. Likewise replies for penalty notices might not have been filed in time. To eliminate this stalemate a full proof system is to be evolved in getting acknowledgement from the assessee confirming the date of receipt of the order/demand notice/penalty notice.
17. The most draconian deeming sections of the Income Tax Act 68, 69, 69A, 69B, 69C and 69D and taxing section 115 BBE of the deemed income @ 60% are to be removed from the statute because these sections are indiscriminately used by NFAC and the assessees are suffering due to high pitched orders by filing repetitive appeals and writs. In many cases the tax coupled with surcharge, interest and penalty are several times more than the income assessed. If removing the taxing sections are not viable, at least the rate of tax u.s. 115 BBE is to be reduced to 30% from 60%.
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