Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: form 3cd :: ACCOUNTING STANDARDS :: empanelment :: Central Excise rule to resale the machines to a new company :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT RATES :: TDS :: articles on VAT and GST in India :: VAT Audit
 
 
News Headlines »
 Invoking Writ Jurisdiction For Income Tax Matters
 How to file income-tax returns online
 How Income Tax Returns Are Scrutinised
 All About New Income Disclosure Scheme to make Demonetisation successful
 Your deposit may draw income tax notice
 Accepting payment under IDS 2016
 New disclosure scheme could see 50% tax and 4-year limit on cash use for unaccounted deposits
 Pay 50% tax on unaccounted deposits, or 85% if caught, says Modi government
 Deadline to pay property tax in old currency extended
 Cabinet clears amendments to Income Tax Act
 Have you got interest on your income tax refund?

Easy tax laws, low rates, fewer cuts can set cash registers ringing
February, 20th 2007

There are expectations galore for Budget 2007 the past year surely warrants the same. The Indian economy was at an unprecedented high with all sectors showing tremendous growth. Much to the satisfaction of the Finance Minister, tax collection figures also stood substantially increased. It is in this setting that the FM will present the Budget on February 28. The question thus arises as to what exactly he has on his mind and what are the challenges that he will look at addressing.

Simplification of the tax laws should definitely be on the cards. There has been talk of a new, simpler Income-Tax Act for some time now. A simpler law would, hopefully, result in better compliance by the taxpayers, including the small and medium enterprises (SMEs), who may currently not be able to comply due to the complexities involved.

The vast existing diaspora of tax exemptions currently provided under Income-Tax Act, 1961 is also under scrutiny. There has been talk of possible removal of a large number of exemptions and simultaneous lowering of overall tax rates. The lower tax charged would surely come back into the economy either via savings and investments or through greater spending.  However, this is a deviation from the traditionally followed philosophy of keeping tax rates high and providing exemptions for specific sectoral growth. If executed, the new philosophy would lead to more equitably distributed tax collections and widening of the tax base aspects which surely merit attention in light of the great economic performance. Care should, however, be taken to ensure that the development of backward areas, infrastructure and the countrys competitiveness in the global outsourcing industry is not adversely affected once the exemptions are done away with. The challenge before the FM is to strike a fine balance between high tax rates and more exemptions on one hand, and low tax rates and few exemptions on the other.

The tax litigation aspect also warrants the FMs attention. Speedy disposal/settlement of cases should be the order of the day. The constitution of the National Tax Tribunal is a step in the right direction, but the implementation should be done effectively and soon.

Revenue laws of a country should be very much in line with the current needs of the economy. In an economy like India, certainty of tax cost will be a big factor in diverting the savings into investments. The FM should look at a consistent and unambiguous tax regime on a long-term basis. Clarifications on taxability of current issues should also be regularly brought out, be it the issue of taxability of shrink wrapped software or taxability of lease line connectivity payments.

Thus, though the setting might be good, the FM has enough challenges on his hands, albeit of a different nature now.

Gaurav Taneja
The author is the national tax director and partner, Ernst & Young.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multimedia Presentations Multimedia Solutions 3D Solutions Corporate Presentations Business Presentations Multimedia Presentation India M

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions