Acche Din ?

“Acche Din” in Indian tax regime –Still a distant dream?

Certain points for introspection as follows may throw some light on how the Government might fare against basic expectations of maintaining if not boosting stakeholders’ and investor confidence in India’s state of affairs.
1. No attempt to do away with complex tax rules promoting litigations
2. Demarcating heavy expenditure outlays for the agriculture sector without any tangible betterment to farmers thus far
As per the newly inserted section 80PA, 100% profit linked deduction to be allowed to registered Farmer Producer Companies having total turnover of less than INR 100 crore and engaged in any of the following business:
• the marketing of agricultural produce grown by the members; or
• the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to the members;
• the processing of the agricultural produce of the members
Are mounting exemptions to the agricultural sector really the need of the hour? Are these expenditure outlays breeding corruptions, generating tax-free incomes towards unjust enrichment and inequality?
3. No measures or action to contain and minimize tax controversies
4. No respite to the genuine taxpayers in spite of specific recognition of the contribution to the national exchequer
Salaried class may be the most disappointed with the Finance Bill 2018, more so because of an undesirable eyewash on the aspect of newly reintroduced standard deduction. Government has provided a nominal relief in the form of standard deduction of Rs. 40,000 replacing the current exemption in respect of transport allowance of Rs. 19,200 (Rs. 1600 per month) and medical expenses of Rs.15,000. Thus, the net take away will be of Rs. 5,800 i.e. the total taxable income of a salaried individual will reduce by Rs. 5,800. Assuming the individual is taxable in the highest slab rate, the basic tax benefit will be Rs. 1,740. Another amendment which shall impact the salaried individuals and which shall negate the aforesaid tax benefit is the replacement of education cess of 3% by health and education cess of 4%. Thus, the standard deduction of Rs. 40,000 will have no tax benefit for individuals earning salary of greater than Rs. 5,00,000 since the said benefit shall be negated by the higher tax rate in the form of increase in the cess by 1%.
5. Is the India tax policy truly start up friendly?
6. Relentless tax terrorism in spite of promises to curb such practices being a part of election manifesto some years ago
Cases such as non-granting of taxes paid in spite of the said taxes reflecting in the Form 26AS as generated on the income tax website. This sheer harassment by the tax authorities has resulted in a loss of faith in the tax administrative system of the country.
7. Making PAN mandatory for more tax payers, especially non-residents in a subtle manner
There may be other deeper aspects of debate and thereby “acche din” appears to be far from being a reality, the more one delves deeper. more