Taxation
Government must not be a tax terrorist: Experts

On April 15, the Central Board of Direct Taxes (CBDT) had notified new norms and the attendant forms that, among other issues, requires an assessee to furnish all bank details, opened or closed in the year with the closing balance, as also the sources of funds for expenses in an overseas travel

 

Even as the central government has decided to review the new norms to file income tax returns barely three days after it was notified, due to widespread angst, experts termed the original proposal nothing but "tax terrorism" unleashed on honest tax payers.
 
"This is real tax terrorism. This does not target corrupt politicians, dishonest bureaucrats or the unscrupulous businessmen and film personalities who merrily evade taxes and stash away their ill-gotten wealth abroad," said P.S. Prabhakar, partner, Rajagopal and Badrinarayanan, a chartered accountancy firm.
 
"The government's decision affects the common people. They are expected to unnecessarily spend huge time and cost even for doing their basic duty of filing returns. It will involve filling up so much of detail not significant to them," Prabhakar told IANS.
 
The move, accordingly, drew loud protests and there were indications that the norms will be reviewed.
 
"The finance minister (Arun Jaitley) spoke to me from Washington. He has asked me to make the format simpler. He said the government must be proactive and he quickly decided to review the new income tax returns' format," Revenue Secretary Shaktikanta Das told IANS on Saturday.
 
"The additional information was actually sought to deal with unaccounted cash. This was also one of the recommendation of the SIT on black money," he said referring to the Special Investigation Team set up by the Narendra Modi government at the behest of the Supreme Court.
 
Asked when the decision will be taken, Das said: "I can't say now when the format will be revoked. We have to follow a process. All I can say now is that the format will be reviewed."
 
Another well-known chartered accountant, M.R. Venkatesh, said nothing useful will actually emerge by resorting to the new forms. "It is really a draconian measure. It has the potential to turn into tax terrorism. The real culprits would continue to go free," Venkatesh told IANS.
 
On April 15, the Central Board of Direct Taxes (CBDT) had notified new norms and the attendant forms that, among other issues, requires an assessee to furnish all bank details, opened or closed in the year with the closing balance, as also the sources of funds for expenses in an overseas travel.
 
People complained the move was far from the promise of making the process of filing returns easier.
 
"Tax return forms are getting more complicated and taxpayer-unfriendly. No matter which government is in power, honest citizens are harassed due to the never-ending sadism of bureaucrats in North Block who seem to enjoy this," said Prabhakar, referring to the finance ministry in New Delhi.
 
"There is no serious attempt to get those millions of people who earn well but never bother to file."
 
Former chief economic advisor Arvind Veermani who knows the subtleties of how the decisions are taken in North Block, also felt the move was ill-aimed. He suggested a much bolder review of the items that were introduced over the past few years to make it simpler for the average assessee.
 
"Can guarantee, it won't cost you much revenue (less than Rs.1 crore) but gain goodwill from ordinary tax payers," he tweeted in a message, ostensibly meant for the finance minister, while also alluding to the fact that there are just 3.7 million income tax assessees in India and fewer who evade taxes.
 
"The revenue department's intelligence wing is either un-intelligent or dishonest. Otherwise, is it possible for any finance minister to shamelessly admit that in this country of 1.2 billion people, only 42,800 filed returns with income of more than Rs.1 crore?" Prabhakar said.
 
"The policy appears to be: Forget those who never file returns, squeeze those in our net."
 
Tax experts said there was, indeed, a stipulation that a person who has been overseas has to file returns. "But asking information for the year that has already gone by even from the salaried and interest income earners, definitely shows an overbearing attitude," said Prabhakar.
 
Tapati Ghose, partner with Deloitte Haskins and Sells, added: "Given that disclosures are required for the financial year 2014-15, one would need to collate and analyse the expenses incurred on the trips made in the recently-concluded tax year."

User

COMMENTS

KAVIRAJ B PATIL

2 years ago

The more columns you are required to fill, the more likely the chance of making mistakes and the more likely the IT department will harass you for the error pertaining to a few hundred rupees. Through PAN, when the government has sufficient information about an individual's bank account, proper compilation of data by the IT department will make this sort of info unnecessary.

Except condemning us to a life of drudgery, these new measures will do nothing to stop black money holders particularly in the real estate field. The BJP's main backers i.e the educated, employed middle class are getting more and more disillusioned at the mindset of BJP leaders.

Mr Jitendra

2 years ago

1) There are 85 crore adults in India who are of working or are already working and earning.

2)There are 17 crore PAN cards issued till date.

3) Around 3.5 crore tax returns are filed every year in India

4) Out of 3.5 crore, some 2.5 crore are salaried individuals

So this clearly indicates that new forms will critically target the salaried class.
Instead of including more and more people into the tax compliance and tax return filing, they are trying to do the reverse.

Complete failure by either bureaucracy or government or both!

Bugs can solve India's uranium dilemma: Expert

India will import 3,000 tonnes of uranium from Canada in the coming five years as per a deal inked between both countries during Prime Minister Narendra Modi's recent visit to the country

 

The exploitation of bugs to extract and process uranium from low-grade ores can help India generate fuel for nuclear reactors in a sustainable and eco-friendly way, an expert said here on Friday.
 
India will import 3,000 tonnes of uranium from Canada in the coming five years as per a deal inked between both countries during Prime Minister Narendra Modi's recent visit to the country.
 
"The quantity of uranium which we require is insufficient in India because we have got low grade ores and the quantity of uranium is very low inside that," Abhilash, a scientist at the National Metallurgical Laboratory, Jamshedpur, told IANS here.
 
NML is a CSIR (Council of Scientific and Industrial Research) institute.
 
"We need more amount of fuel that's why we have signed agreements with Australia, Canada and other countries so that we can take uranium and use as fuel. Micro-organisms can solve the problems of uranium extraction from low-grade ores in India," Abhilash said.
 
He said that by harnessing micro-organisms to leach uranium (a process called bioleaching) from ores, India can ensure indigenous uranium production to feed the planned nuclear reactors.
 
"We can use our own resources and it is sustainable. We use the bacteria available in the mines," the scientists said here on the sidelines of a conference here.
 
Explaining the process, Abhilash said the particular species of bacteria can be harnessed to convert the uranium in the ores to a usable form called 'yellow cake'.
 
"We have the ore which contains iron and uranium both and this bacteria, growing proficiently on iron, takes the iron which is soluble and converts it into further soluble form like an oxidant. This helps in converting uranium to another form of uranium which is in solution."
 
"What industry does is that... they precipitate it and make yellow cake which is radioactive. This ore is not radioactive. So they pack it and send it to Hyderabad. In Hyderabad, we have Nuclear Fuel Complex," he said, adding that the technology is eco-friendly.
 
Established in 1971, the Nuclear Fuel Complex is a major industrial unit of Department of Atomic Energy, for the supply of nuclear fuel bundles and reactor core components.
 
"This technology also can be a parallel technology for those kind of raw materials where we have extracted uranium ore in the solution, we can purify it and give the yellow cake to the Complex," he said.
 
However, the "single demerit" of the process is that private players cannot have access to this technology.
 
"We can't have private players working in this technology. We only need Indian government because uranium being a strategic material we can only have the government's participation," he said.
 
Abhilash said the procedure has been applied to two tonnes of ore so far and the scientists are now scaling it up.
 

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Jaitley says 'no retro tax' as claim cases continue

The finance minister said the government had taken the position that in cases where the courts had given their verdict in favour of the companies, no appeal will be filed despite such an option existing

 

Even as court battles continue over tax demand on foreign firms on deals entered in India before the change in laws, Finance Minister Arun Jaitley has sought to clarify his stand of not pursuing retrospective taxes, but said some cases were different.
 
Speaking at the Peterson Institute for International Economics here on Thursday, the finance minister said the government had taken the position that in cases where the courts had given their verdict in favour of the companies, no appeal will be filed despite such an option existing.
 
"There are, however, two categories of cases still pending -- some under investment treaties are in arbitration, while some others where notices were issued earlier but the assessments are being completed now... they fall under one category and we are waiting for the judicial process (to get over)."
 
At the same time, alluding to the recent capital tax gains demand of Rs.40,000 crore from foreign funds, which again raised concern, Jaitley said these entities had, indeed, asked for a waiver stating that it was an unfair tax. But they lost the case in courts.
 
"So, for future I have abolished it (minimum alternate tax on capital gains) from April 1, 2015," he said, adding: "But their expectation that having lost the case the state must now intervene, that looks a little difficult from my point of view."
 
The finance minister, nevertheless, said such funds had the option to take their appeal to the courts. He also emphasised that Prime Minister Narendra Modi's government had stuck to its promise of not sending a single notice for a retrospective tax demand.
 
"Some of these contentious cases, in all honesty, have not given me a single rupee of revenue so far. They've only brought a bad name to me. And these are essentially because of old legacy issues," Jitley said.
 
Even as the finance minister was speaking, Cairn India was fighting a legal battle with the tax authorities in India, with its counsel, citing various judgments, telling Delhi High Court that the fresh tax demand of Rs.20.495 crore imposed on it was uncalled for.
 
The matter pertained to the purchase of India assets of Britain-based Cairn by the Vedanta Group in 2007. The Indian entity said tax matters must be raised within a reasonable time and that the present late demand was "unreasonable and atrocious".
 
Similarly, the government also decided to pursue a capital tax gains demand of Rs40,000 crore from foreign funds, a matter which the finance minister touched upon in the speech that was circulated by the Indian Embassy here -- the one from which he deviated.
 
"I'm acutely aware that there are concerns about retrospective taxation, tax harassment, the unpredictability and arbitrariness in our tax administration especially relating to transfer pricing," he said.
 
"Let me emphasise we are absolutely committed to a transparent and predictable tax regime. There will be no retrospective actions. We will see taxpayers as partners not as potential hostages," he said at the talk on "Tax reforms in India: Vision for the future".
 
"Let me also highlight actions that have not received sufficient attention. This year, two high court rulings went in favour of Vodafone and Shell that the government did not contest, reflecting our commitment to not being adversarial," he said.
 
Spelling out a tax vision for India at the leading think-tank on global economic issues, the finance minister said he believed that with the reforms underway in India, the country was well on its way to having one of the more modern tax systems in the world.
 
He spoke about the proposal for a pan-India goods and services tax and how it will create a single market in India, as also how the distinction between foreign portfolio and foreign investment was removed in a bid to simplify procedures.
 
He also said that moves were afoot for a moderate tax regime, that was fair and equitable.
 
"Currently we have in some ways the worst of both worlds: High marginal corporate taxes but low effective collection. We create the perception of a high-tax country and yet we do not collect commensurate taxes. We need to change this to promote investment and growth."

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