Budget 2009 was an excellent opportunity for the UPA Government that has been wasted, felt tax consultant and advocate Mukesh Patel. He said the Union finance minister could have done much more for the 'aam aadmi' (common man) including the middle class as the government enjoyed political stability.
Patel, who has been giving informative lectures on Budget 2009 across the state, was in the city on the invitation of Junior Chambers International (JCI), Vadodara. This budget was full of ironical contradictions and has missed opportunities for several reasons. One of them is that about the common man. While some of the provisions have been made in favour of the common man, a few new provisions in the Income Tax Act are very notorious, Patel added.
The new provision in the IT Act under section 56 (2) is very strange wherein the government wants to tax notional income. The provision is very subjective and it gives the concerned officer authority to interpret it in his own way. This may cause harassment to the taxpayers and may breed corruption, Patel said.
The provision that will come into effect from October 1, 2009 seeks to tax gifts in kind and any immovable property worth over Rs 50,000 that has been gifted on the basis of its stamp value duty. Under the new provisions if the purchaser buys any land, shares and securities, jewellery, painting, archaeological things below the market value he will have to pay the tax on the money he saved as it would be considered as his income.
On one side, the finance minister said he wants to simplify the provisions and on the other hand he has complicated them. The first thing government should do is stop making amendments in the acts. And, more importantly, it is necessary to simplify the mindset of bureaucrats while simplifying laws, Patel told chartered accountants (CA), lawyers, professionals and students who had gathered to listen to him at Vanijya Bhavan.
He also said advocates need not protest over the service tax issue. If an individual lawyer is providing consultancy to anyone and charging any amount of fee, he need not pay service tax. Only legal firms have to pay service tax if they provide service to any company. If the legal firms provide service to any individual then too the fees charged don't come under the purview of service tax, Patel said.