Business
Government must not be a tax terrorist: Experts
By
Venkatachari JagannathanChennai, April 19
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."
(Venkatachari Jagannathan can be contacted at [email protected])