Union Budget 2023
Though, the expectation from the Union Budget is higher in every coming year, all the expected will not realise as eighter no priority, not for this fiscal, not required, to be studied further, revenue loss not accessed, present economic condition, not growth oriented and various reasons best known to them. However, some of the thoughts are still running in the mind of CA like us and I am satisfied only be mentioning them.
Income Tax
One Form of Return
The recent news of one Form of Return than various forms from the CBDT is the step in the right direction, However, I expect, this form should not be having all the pages of all the forms earlier. Otherwise, the new one form will be of more than 100 pages and the whole exercise will be a big waste. I also expect, the new one form will not have additional details required to be filled which otherwise are not there in the old forms. This Form should be ideally one page form.
Residential Status
Recently, I came to notice that the students going abroad for higher studies though they stay out of India for more than 182 days, they are Resident with the second proviso that is being in India for more than 365 days in immediately preceding previous four years. So, in the first year of their studies all of them are Resident for Income Tax purpose.
Now, in case they undertake some smaller assignments for teaching, working on cash counter, or some part periodic jobs which will reimburse their expenses of study or a small portion of earning to compensate and reduce their parents’ financial burden. All such income is taxable as being resident the global income is taxable. Moreover, the details in Schedule FA, A1 to G, to be filled in, if applicable.
I think, the Govt should not have intention of any increasing revenue from these students as it is not an income at all but compensating some burden of expenses, those who have resources may not do anything to earn abroad.
I strongly expect the Second condition of being in India for 365 in four preceding years should not be applicable to the Bonafide Students gone abroad for higher studies. If they are out of India for 182 days, Bonafide Students of University for Higher Studies they should be treated as non-resident in the first year itself, this also keep them stand at par with the FEMA.
Allow them to complete their higher studies, earn more and then contribute to their country in big way.
Filing of Return
I started to file a return of CAB Driver who earns Rs.25000/-p.m. that is Rs.300000/- annually. Information in 26AS, TIS, AIS is NIL.
He must answer or give details of following.
- Whether a Director, Partner, Unlisted Equity shares, at any time in previous year beneficial owner of asset, any income, signing authority out of India.
- Whether, He has filing return under 7th proviso to Section 139(1)
- Whether assessees is declaring income only u/s44AE & all the rest Sec 44, then additional audit information a (2).
- Whether he is exercising option u/s 2A of Sec.92 CE in General Information schedule TPSA.
- General Information Nature of Business, GST Details, Profit & loss Account.
- Maintaining of books of accounts is necessary if income is more than Rs.250000/- otherwise return will be defective.
I told him, to file his return from some other CA from next year.
The development in the System and Information collection with 26AS, TIS, AIS and so on from various agencies does not reduce the burden of various details in the Income Tax Return Form.
I expect, if no information in 26AS, TIS & AIS, only two details to fill, Income and nature of business and PAN only. This also should be considered, while preparing New one form of return.
Sec 115BAC
Availability of the New Tax Rates
Presently, the assesses can opt for this scheme only if he files the return within the due date. After the due date of filing the return, he must pay tax as per the old rates, with late fee u/s 234F. I think, this is injustice to the belated filers, those who may not be able to comply with in due date but want to discharge their duty are illtreated. They must pay penalty for the late filing over and above the higher rate of tax. There are some preconditions also attached, to fill the form and number of times the switch is allowed.
I expect, this budget should remove all such preconditions for optioning of the new tax rate. The duty bound assesses will be twice penalised at the flag end by old tax rate as well as penalty of late fees. If you wish to give some benefit, give them generously and without precondition.
Due Date of filing and the Data available for return
I strongly expect, if due date of filing is four months from the end of the FY, then all the forms should be available in one stroke as on 01st day of the Assessment year i.e., 01st April, otherwise due date will be the four months from the date all the returns forms are available. The due date should not be decided till forms are available.
Once the forms are available and notified, there should not be any change in schema for that assessment year, I think we should now get away with ever changing schema of the filing forms.
Notification of considering the data available for the return. The information in the TIS, AIS change till the last date of filing as the filing or revising the AIR by the filers. The information available, though not in the TIS, AIS is considered by the assesses while filing the return.
I expect, the notification that, the data, information in TIS, AIS will be considered before one month from the last date of the filing of the return, In case, additional information is reflected, which otherwise not known to the assesses, the same should be included in the subsequent assessment year, or revision of the return to that extent only, one page revision details to be filled if required.
Exemption u/s 54
Nowadays, the medical treatment cost is increased manifold and required very huge amount. I attribute the increase in medical treatment cost to the average insurance value (cover) by the agencies who provide the treatment instead of average spending power or purchase capacity in the society earlier.
Many a times, the patient has to sale his securities, bigger house, investments etc over and above the insurance cover available and claim settlement amount for medical treatment.
To live is the foremost right of a person, and he has right to live by spending all available resources with him/her, to tax this right is not a good proposal for society.
I expect, there should be exemption from all type of capital gains to the extent the amount is spent on medical treatment.
Taxation of Global Income
With increasing devaluation of the Rupee against the US dollar, I think, it is proper time to reconsider this policy for the Bonafide Salary earners, in Tax-free countries. I think the purpose of this amendment is not to tax salary earners but to avoid tax evaders. If it so, this budget should amend saying the Salary earnings of the employees whether the persons go on permit or for known identified and proved services will not be considered for taxation.
Income from Salary earned with a certificate of Salary in particular format will be exempt from the Income tax for Resident individual, irrespective of their stay in India provided, the salary earned in foreign exchange and for the services should rendered outside India.
Spread of the persons who file the returns
It is also high time, we should finally take a call from whom we want to recover the taxes and from whom we do not expect any taxes as they themselves have needs beyond their income, which they try to cope with the resources accumulated by them.
I think, by only announcing that, only a few persons file the income tax return in comparison to the total population and treating all non-filers as distrusting society, we should also retrospect, whether, we as law-making authority, execution authority and society in general unable to make the things simpler for the majority of the non-filers to give confidence that they can file easily with minimum efforts & make them know why filing is nation building. To my mind, this will be only happened, when we do not make laws or rules for two defaulters but for 98 compliers.
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