Suggestions For This Budget:
1. Honor those Who are Ranked in Top:
This suggestion is made to give due respect to the citizens of India whocomply with the provisions of the Taxation Law and ranked top in the paymentof their taxes direct and or Indirect. By Honoring them we are creating a cultureof voluntarily compliance in the balance of the tax payers.
The Scheme may be formulated in following lines.
1. Select the Top 10 Tax payers in each taxes ( Income Tax, Service Tax etc )in the City like Mumbai,Channai, Bengluru, and Delhi. The othercities may be added on the success of the scheme.
2. The Names will be remain confidential and be announced and publishedafter the consent of the taxpayers in writing.
3. A letter of thanks be send to them by the Hon. Finance Minister and/orHon. Priminister for their contribution to the national kitty.
4. They should be not selected for the Scrutiny for the respective year.
5. They may be invited for Lunch/ Dinner with the Hon. Minister wheneverthe same will visit the the city.
6. The Respective Tax Dept at highest level be instructed to look in toany pending issues of these assesses with the Dept. and solve or findthe solution for all their issues in that year is self.
7. If consented their names along with their rank and year may be displayedin the respective Tax Dept, so that they get respect whenever they visit the office of the Dept.
The Scheme be formulated in such way that a healthy competitionbe generated among the tax payers to get in to the list of Rank Holders. The Dept. should announce the basic criteria for the scheme and minimum amount of taxthe last ranked holder paid in the previous year at the beginning of the next yearit self.
At present, this class goes in to maximum harassment, in the name of monitoring the big tax payers. There cases are selected for the scrutiny. They get a call every quarter at least about their payment of Advance Tax.
They have to reply along with the challans paid in writing at the end of the quarter, with an explanation why the payments are not in tune with the previous year.Over and above being the higer tax payer the expections are high.
2. Machinery for Supervision
It is observed that, all the staff of the tax dept, still not observe the instructions issued by their higher authorities. In case of CASA Scrutiny cases, there are clear instructions that, the reasons for which the case is selected for the scrutiny be informed to the assessed and only those points for which the case is selected for scrutiny be verified by the assessing officer. In case, he has some issues of some other points and observe additional points to be scrutinized on the basis of prima facie evidence on record, he has to obtain a written permission from his higher authorities for scrutiny of other points. However, It was observed that, the assess has not given any information on such points. The officers go on demanding the details like previous last three years P/L & B/S comparison and so on. The requirement of details will only finished when he decide the same. This lack a total transparency between the dep't and the assesses.
When such scrutiny is over, immediately the file may be checked by the higher authorities and the list of details demanded and submitted by the assesses may be obtained from the assessee.An explanation for additional details may be called for.
I suggest a suitable measures for 100% Transparency between the taxpayer and the respective tax dept.
3. Increase in Basic Exemption Limit pescribed under The Service Tax Act;
I suggest the basic eligibility for registration under Service Tax Act be raised from the Present level of Rs.10/- lacs to Rs.25/- lacs the applicable limit for Tax Audit in case of Professional, and Rs.100/- lacs for other than professionals. This will help in reducing the huge compliance to be made by the tiny business & professional class to maintain the records comply with the collection and payment of the taxes.
Those who come under the preview of Tax Audit has geared up their compliance level that the additional burden of service tax will not pinch them.
I Suggest the minimum exemption limit for Registration under the Service Tax Act be increased from Rs.10/- lacs at present to Rs.25/- lacs for professionals and Rs.100/- lacs for others the limits prescribed for the Tax Audit U/s44AB of the Income Tax Act.
4. TDS Rates on Professional /Technical Services'/194J
At present the TDS rates are 10% on professional services, earlier the rate was 5%.
The rates are higher and will block a huge amount of fees of the small professionals working capital in the TDS. They are getting the refund almost after a year of the end of the financial year. If they have to obtain a permission for the lower rate of TDS from the authorities, Either the procedure is cumbersome or when such lower deduction order come the year is almost come to an end.
A small professional say having Gross fees of Rs.10/- lacs the TDS amount comes to Rs.1/- lacs. His profit of about say 50% say Rs.5/- lacs. The Tax on this income will be around Rs.10000/- only after the deduction U/s80C.The balance of TDS of Rs. 90,000/- will be blocked and will be get by him after one and half year from the end of the financial year. Such refund will be observed in almost all the cases of the professionals.
I suggest to reduce the TDS rate u/s194J to 05% from 10%.