A separate income tax legislation is needed for corporates and individuals

The preamble to the Constitution of India states that people collectively made India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC.

The Indian constitution recognises the supremacy of law above the government. The constitutional values reside in elevation of individual above the state and elevation of law above the government. It is indeed a great honour to born and rise in this part of the space, where the constitution provides certain rights and freedoms. In many countries, their stakeholders are deprived of such rights and freedoms provided to us.

However, the real argument is whether an individual is protected from being prosecuted and imprisoned by several laws of the country!

Take for example, the income tax law of the country, it applies uniformly to big corporates, small businesses and even to non-business people. This is a bit tyrannical. Common man comprises over 85% of the country’s population. They don’t even know what the income tax law is. In such a scenario making them liable for transactions entered unknowingly in the guise of “Ignorantia juris non excusat” is very harsh.

The cost of compliance or the burden of penalties are driving the small players out of the business as the Income Tax authorities started implementing the existing regulations sternly from the recent past. In some cases, the taxes and penalties are more than the value of the transaction. The common man enters any transaction whether business or non-business for his livelihood or for his family subsistence. He never knew the existence of a particular regulation or it’s implication of non-compliance.

As per the existing income tax law, an individual earning salaries, rents, small profits, capital gains, interest etc. has to bear the taxes, penalties and imprisonment (rigorous) at par with a large business entity. This is contrary to the principles of democratic freedoms guaranteed by our constitution. There should not be any imprisonment of an individual earning small profits or non-business incomes.

In a conservative and ideal law of taxation, the law should be separate for corporates.

Hope the legislature will rectify this anomaly very soon.