Budget 21-22 for the Direct Tax Payers
It is the budget day. Awaited by many. It was the first year after COVID 19 broke out. Share markets had taken a bearish look earlier, but then it revived the market sentiments. Market was up more than 2000 points at BSE. A good news.
Earlier budget was viewed in a different pattern. It used to change certain patterns of Indirect and Direct taxation. Government of the people but the public property was always considered to be no wealth by the people at all. The subsidies and concessions were worked out. Some used to gain and some used to loose. Hording and profiteering was part of the game. There was a negative grown over GDP during the times of Covid 19. Revival was looked into. Foreign Investments was good news. There was anticipation as to what shall be next move to bring liquidity in the market and gain the confidence of the business people in their working. How to deal with the corruption and the delays mostly in the adjudication of the cases.
During the covid times, Faceless assessments had started. The first appeal before the commissioner Appeals had also turned faceless. A big change. It should have been implemented for the Indirect Taxation as well. May be for the nos, this has not come up now but after the Direct taxes. This will follow. Budget proposes that Income Tax Tribunals shall be working faceless. Waiting for the technicalities to be pronounced. But certainly a very good move. Should be appreciated by the tax payers as they would be harassed less. The amendment at section 148 is again a welcome move. Now , reopening, from Eight years, it is restricted to just three years. In case, if the department has materials of concealment of more than Rs 50 Lakh in a year , then the reopening can be for ten Years. To appease the search assessments, the block period, instead of six years would constitute of just three years. . It helps to keep the loads. The limits for tax audits have been increased from 5 Crores to 10 Crores. The income tax Settlement Commission has been scrapped off from tomorrow itself. No new cases of settlement can come up and the cases that are pending shall be taken up by a committee. For the smaller tax payers, Dispute Resolution panel has been constituted. Steps has been taken for the fair administration which shall bring a confidence over the department by the tax payer. The NRIs have been given the privilege to constitute one man company too. The bill has proposed a new valuation method for capital assets received upon dissolution or reconstitution of an entity. Tax benefits have been extended for one more year to the Rental housing projects as well as to the start ups. Slump sales has been redefined. Income tax appellate Tribunal goes faceless. Under section 32, Goodwill is brought out from the block of assests. For the defective returns, powers have been given to CBDDT to grant relief in certain cases. For the purpose of assessment, the time limit reduced by 3 month. Meaning that the AO has to complete assessments in 9 months. For the search assessments, a new procedural framework has been set. All these provisions are in favor of the tax payers who have been paying taxes and get scared in some ways or the other. It reduces the time and money both. It is a move towards minimization of the litigations. The Authority for Advance Ruling has been constituted to resolve the matters of disputes which may arise, so as to appease the complexities in interpretations, before hand. This shall help the tax payer a definite commitment before he acts, and he does not feel betrayed with the change in the official. This shall help a lot in minimizing litigation. It shall change the ways of tax practice too.
For curbing down the evasions, the government has proposed a levy of 0.1 percent TDS on purchase o goods and 0.5% TDS if the purchaser does not provide his PAN number. Section 271 AAD has been introduced for the anti abuse provision, alike section 281D. This is to attach the properties where even penalty is livable. This looks to be a strong provision. For the non fliers, there is a big blow as budget proposes higher TCS rates there. Any person contributing more than 2.5 lakhs in Provident Fund will not draw exemption on interest, which would be taxable. On ULIP, tax benefits have been withdrawn. Cases covered by the settlement Commission, do not fall in purview of Vivad se Vishwas scheme..
For investigations, Rules have been tightened and the search team has been made more responsible. Reasons for conducting the search and the material found needs to be matched. For this the modern techniques of information collections by the bodies working together, shall be helpful for finding undisclosed wealth too.
The budget proposes a good disinvestment where it looks that the Government intends not to adapt the role of governance by hiring the people for the performance.
The budget for a income tax payer, looks like this in brief. There are lots which can be understood and taken into apart from the same. It is upon the tax payer to understand as to what the intention of the government is. It makes the area of collection and its performance quite transparent and removes the middlemen in Liaoning. It looks a good work for the persons paying tax and also the tax professionals.