Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
« Top Headlines »
Open DEMAT Account in 24 hrs
 March 31 deadline is getting near. How to save income tax with tax loss harvesting?
 45-day MSME payment rule: Impact and details of Section 43B(h) explained
 Small savings schemes that offer tax benefits of up to Rs 1.5 lakh under section 80C
 RE-OPENING OF CORRECTION WINDOW FOR MAY 2024 CA EXAMINATIONS
 Powerful Upgrades, Tally 12+1 months renewal Plan and Connected Services for your growing Business - March 2024
 How innovative solutions can help fix the Sec 43B conundrum for MSMEs
 Income Tax dept asks many individuals to explain high value transactions of FY20-21 as Updated ITR deadline nears
 Release Notes for TallyPrime and TallyPrime Edit Log Release 4.1 | What s New!
 Deadline to file updated ITR FY20-21 ends on March 31: Details on additional tax
 4 tax-planning mistakes to avoid this season
 ITR 2024: Here are 8 ways by which senior citizens can save on taxes this year

Govt vets new tax regime to tighten grip on individuals
January, 15th 2008
Individuals will have to start reporting their income from all sources in due course, including tax-free income.

The government is vetting a proposal to shift from an exemption to a deduction-based regime for reporting income, a government official said. This means while computing the tax outgo, an individual has to include income from all sources and then claim a deduction on tax-free income. The objective of the proposal, set to feature in the new income-tax code, is to establish an audit trail.

This, in turn, will help widen the assessee base as more people will file tax returns. There are 3.5 crore tax assesses in the country. The proposal is also in sync with the goal of linking all transactions of an individual to his permanent account number (PAN).

The new income-tax code will replace the existing Income-Tax Act, 1961. A concept paper on the new code is on the cards. The focus will be on policy changes that need to be carried out in the long run, an official said.

The government, for instance, can elicit a feedback on the phase-out of various corporate tax exemptions or even propose new policy initiatives on non-resident taxation. The code may incorporate a basic formula for tax calculations to make it more user-friendly.

Provisions will be regrouped for easier interpretation. Currently, individuals or non-corporate assessees do not have to include income from certain sources while calculating tax outgo. These include agricultural income, insurance receipts, long-term capital gains and dividends, among others. They are spared of paying tax on such income.

However, the proposal could have political ramifications if the norm is applied to farm income. Right now, individuals who earn only agriculture income do not have to file tax returns and are out of the tax net. Those who have other sources of income besides farm income have to report income from agriculture in tax returns.

This is required to compute the rate of tax, which is then applied only on non-farm income. One option being looked at is to maintain status quo on the existing tax treatment for individuals who earn only from agriculture. So, the deduction-based regime will apply to other non-corporate tax assesses.

The proposal to usher in a deduction-based regime will mark a significant change for non-corporate assessees. They will have to report income from all sources, irrespective of whether they pay tax on a particular source of income. This means non-corporate assessees could be subject to greater scrutiny. From the tax authorities perspective, it will strengthen the audit trail, Ernst & Young tax partner Jayesh Sanghvi said.
Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting