Increase monetary limits for compulsory tax audit for businessmen
What they say
The experts suggested that the Finance Minister should increase the monetary limits for compulsory tax audit in the case of businessmen, from the prevailing Rs 40 lakh to at least Rs 1 crore.
In the case of professionals to Rs 25 lakh from the existing Rs 10 lakh.
Describing the new ITR-4 Form, which warrants a 24-page return, and bears 10 pages of instructions for those having income from business as anything but simple, tax experts, lawyers and industry representatives urged the Finance Minister, Mr P. Chidambaram, to simplify the form and revisit the issue for better tax compliance.
The experts also suggested that the Finance Minister should increase the monetary limits for compulsory tax audit in the case of businessmen, from the prevailing Rs 40 lakh to at least Rs 1crore, and in the case of professionals to Rs 25 lakh from the existing Rs 10 lakh. It is felt that the limit has not been increased since introduction of the provisions of Section 44AB way back in 1984.
Speaking at an interactive session organised by the All-India Marwari Federation here on Monday, Mr J.K. Jaithalia, senior advocate, said the form, despite a 24-page return was still not comprehensive as plenty of unnecessary information was being sought, causing problems for small businessmen.
He also questioned the rationale behind the appointment of mere graduates as Tax Return Preparers for such complex return forms, which, according to him, even the experts were finding difficult to handle.
Suggesting that the crux of the problem was with regard to the lower monetary limit prescribed for compulsory maintenance of books of account, Mr Narayan Jain, tax advocate and author, said bulk of the details relating to Profit and Loss Account and Balance Sheet were being required to be filled in only in ITR-4, in cases in which books of accounts are required to be maintained.
Pointing out that it was necessary to revisit the income limit and gross receipts prescribed for books of account, Mr Jain said in the case of specified professions such as legal, medical, engineering etc, the limit of gross receipts should be raised to Rs 10 lakh, and income to Rs 5 lakh from the existing Rs 1,20,000 for compulsorily maintaining books of account.
Favouring simpler return forms for better tax compliance, Mr Sudhanshu Seal, MP, said the monetary limits for maintaining books of account deserves to be upgraded. He felt this would reduce the tax burden on assessees who may be in a better position to tackle the new ITR-4 Forms.
According to Mr P.R. Agarwal, President of the Bharat Chamber of Commerce, while the changes brought forward in the new ITR forms were in the right direction, there was definitely a case for critical evaluation of the new ITR forms.