| Direct Taxes : |
| 1. |
TAX ON FRINGE BENEFITS |
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Without prejudice to the above provisions relating to FBT should be amended so as to have the following relaxation: |
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The small and petty partnership firms and companies having certain minimum turnover are required to be excluded from the levy of the FBT. |
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There can be no levy on genuine business expenditure. |
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Under no circumstances should FBT be levied without identifying the expenses that have actually resulted in any “benefit” to the employees. There can be no levy on expenses, which have no connection with employees. |
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It should be distinctly provided that once there is FBT levy; there will be complete exclusion of income taxation in the assessment of employee. Presently, the exclusion from the assessments of employees has been restricted to the items of perquisites covered by section 17(2)(vi) of the Act. [Refer Section 115WB(3)] |
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It should be distinctly provided that a perquisite, which is chargeable to tax in the hands of an employee, will not bear any FBT even if the amount is exempted in his assessment under section 10 or even if there is no tax payable by the employee due to his income being within the threshold limit. |
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There is need to introduce a threshold limit up to which no FBT can be levied. This could be based on a certain value per employee per year. |
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Procedural aspects like filing returns and assessments, appeals, etc. may be combined with existing procedures instead of separate procedure. |
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Deduction may be allowed for Fringe Benefit Tax as an expense. |
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Payment of advance FBT may be allowed on `estimated’ fringe benefit provided during respective quarter instead of actual fringe benefits. |
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Contribution to approved superannuation fund may be exempted from FBT or payments from such funds to the employees may be fully exempted from income tax. |
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| 2. |
EMPLOYEES' CONTRIBUTION TO PROVIDENT FUND, ETC. |
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Deduction for employees' contribution to Provident Fund, etc. should be allowed if paid before the due date of filing the return in line with the amendment carried out in S.43B w.e.f. 1st April, 2004 |
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| 3. |
DISALLOWANCE U/S 40(a)(ia) |
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Disallowance of certain payments u/s 40(a)(ia) for non deduction and non payment of TDS has no justification, in particular in case of payments to residents and should be deleted. |
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| 4. |
DISALLOWENCE UNDER SECTION 40A(3) AND RULE 6DD: |
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There should not be disallowed in case of genuine need. Further, the limit of Rs. 20000/- is too low under present economic conditions. The limit my be increased to a practical of Rs.50000/-. |
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| 5. |
SECTION 44AB 44AD, 44AE, 44AF: |
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As the turnover limits of Rs. 40 Lacs u/s. 44AB should be increased to 2 Crore and simultaneously some formula, equivalent to indexation in Long Term Capital Gains, should be brought in, to automatically increase the said turnover limits each year to consider inflation factor.
The ceiling limit laid down to avail the benefit of presumptive Taxation(U/S 44AD,44AE,44AF) be increased up to Rs. 1 Crore.
Presumptive Rate of tax under section 44AF should be reduced to 2 % of the Sales / Turnover / Gross Receipts. |
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| 6. |
COMPUTATION OF CAPITAL CAIN BASED ON STAMP DUTY VALUTION : |
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The power of Assessing officer (u/s 50C) to substitute the sale consideration of a Capital asset being Land, Building or Both as existing today is very arbitrary and would breed corruption. Moreover, the value adopted or assessed by any Authority of state Government for the purpose of payment of Stamp duty is do not even present Market Value. The provisions as it stands would only increase futile litigation and is not likely to get any substantial revenue for the Government. It is suggested that section 50C may please be deleted. |
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| 7. |
Provisions relating to Gifts |
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There are adequate provisions under the Income-tax Act to control or punish the wrongdoers who indulge in grant or receipt of bogus gifts. The present amendment taxing gifts shows the Government's helplessness in spotting and punishing wrongdoers undermining the credibility of tax administration. The new provision will be a center of harassment in genuine cases. Similar provisions sought to be introduced twice over in the past - were, for valid reasons, withdrawn after due consideration. Therefore, these provisions should be omitted. Even assuming the provisions remain on the statute, they should be rationalized appropriately. |
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| 8. |
DEDUCTION u/s. 80-IB-HOUSING PROJECTS |
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The condition u/s 80-IB for completing the housing project within a period of four years is too stringent especially in case of larger projects, and hence the condition should ideally be removed. |
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| 9. |
PAYMENT OF TDS AMOUNT IN ADVANCE |
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To simplify complex procedures prescribed for making various TDS payments, a Scheme of Deposit of taxes deducted at source on the lines of Excise' "Personal Ledger Account" may be introduced. |
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| 10. |
EXEMPTION FROM T.D.S. FOR REGULAR ASSESSEES |
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The provisions of TDS should not be made applicable to those assessees who are regularly assessed and who have already been allotted Permanent Account Number.
Tax should not be deducted from the deposit made by a trust or NGO’s or senior citizens this will reduce the administrative burden of the tax deductor, deductee and of course the revenue while processing their refund claim. |
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| 11. |
DEMATERIALISATION OF TDS AND TCS CERTIFICATES |
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The existing system of issue of TDS and TCS certificates should be continued parallel together with the new scheme for at least 2 years |
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| 12. |
BAR OF LIMITATION FOR IMPOSING PENALTIES - S.275 |
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The amendment made by Finance Act, 2003 should be reversed and earlier provision should be reinstated under which, the order imposing penalty could be passed by Assessing Officer only within six months of receipt of CIT(A)’s Order or Appellate Tribunal's order. |
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| 13. |
RATE FOR TCS |
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TCS rate for scrap is some times higher than profit from it, so it needs to be reduced. |
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| 14. |
TAX ON VOLUNTEERY DISCLOSED INCOME: |
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Opportunity may be given to the assessee who wants to declare undisclosed income or assets suo-moto before any notice of inquiry is issued to him regarding that income or assets with a tax rate of 60 %.
Also, the similar tax rate of 60% can be made applicable on those cases where an assessee during the course of the assessment proceedings wants to offer any income to avoid litigation. |
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| 15. |
AGE LIMIT FOR SENIOUR CITIZEN |
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The age limit for getting the deductions/exemption under the Act should be 60 years, instead of 65 years to make uniform with Ministry of Central Governed |
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| 16. |
STANDARD DEDUCTION FOR SALERIED PERSON |
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Standard Deduction U/s.16(i), which was allowed to salaried person up to Assessment year 2005-06 should be reintroduced for providing benefit to genuine Taxpayer of the Country. |
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| 17. |
EXEPMTION FORM TDS U/S 194A |
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The exemption limit provided for small payment of interest other than Securities Rs. 5000/-, should be raised to Rs. 10000/- |
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| 18. |
1/6 SCHEME FOR FILLING OF RETURN SHOULD BE OBILISHED |
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The person covered in compulsory filling of return under following economy criteria should be obliged, because it’s increased administration with no revenue. |
| Indirect taxes: |
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1. |
Simplification and separate enactment of services tax with limited exemption and abatement notifications. |
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Excise duty rates to reduce at the level of at the maximum of 16 % where they are above those levels. |
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Rationalization and simplification of excise and customs law |
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Reducing the level of import duties at ASEAN level |
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