There are already talks in the market that this year's budget will have some drastic changes. The last year's budget went through a lot of changes very frequently and immediately within a very short time of its presentation, it only means more work, multi-tasking, weak assessment of the effects of the budget proposals on the economy. I expect this time there were no such things and the proposals will remain the same at least the majority of the coming budget year.
The process of filing various returns still has large scope to be simplified. Provision for filing of Revised Return at least in case of GST R1 & GSTR 9 has to be introduced. This may be done with or without penalty or Revised filing fees. Revision does not necessarily mean evasions rather than it has all other reasons than evasion.
The periodicity of GSTR-1 should be half-yearly rather than present quarterly for small & medium taxpayers. The provision for half-yearly returns was there in the Service Tax Act, this will make the returns at par with the earlier law.
The payment of GST on receipt basis should be introduced to all the assesses having a turnover of Rs.100/- lacs. Such provision was already there in the Service Tax Act for turnover up to Rs.50/- lacs.
The rate of TDS should be linked to the turnover of the services rendered. A lower rate of 5% for services turnover up to Rs.100/- lacs, 10% above Rs.100/- lacs to Rs.150/* lacs & 15% thereafter. The TDS rate of 10% was very high and thereby will reduce working capital at the disposal of the small services provider.
One of the reasons for the slowdown is the shortage of working capital disposal in the hands of small & medium enterprises. How this position will improve after giving the effect of above expectations is enumerated as follow;
|Present Position||Change Position||Increase in Working Capital|
|Less: GST 18%||Accrued||18||Receipt||0||18|
|Bal Working Capital||82||100|
|Less: TDS @10%||10||5||5|
|Net Working Capital available||72||95||23|
The additional available working capital will definitely improve the economy.
LONG TERM CAPITAL GAIN TAX:
The long term capital gain tax on shares which is presently @10% should be abolished. This has increased more workings than the collection from the same.
INCOME TAX RETURNS:
The columns of Sale/Redemption/ etc of the mutual funds, SIP etc should be removed. Let us compare the Saral Income Tax Form in the Hon . Atal Bihari Vajpayee Govt with the present form, you will find there is wide scope for simplification.
I still believe that there will be no harm in any way to the Govt by filing the return of any earlier year voluntarily, this will require the amendment in Sec.139 of the Income Tax Act. Compliance-based taxation should have very fewer restrictions.
INCOME TAX RATES:
In view of the slowdown of the economy which results in a reduction of the employment generation, the income tax rates should be interlinked to the number of new employment generated by the enterprises during the Budget Year. The Tax Rate will be less by 5% if more than 20 new employment is generated and so on. The E.S.I.C. or other records should be asked for verification of the concessional tax rate.
INTEREST RATES FOR WORKING CAPITAL FINANCE:
It is also possible to link the interest rates for working capital finance with the generation of new employment and improvement in the turnover from the previous year. Say, If your turnover is increased by more than 50% in comparison to the immediate previous year you will be eligible to have a rebate of 0.50% on the interest rate as well as if the new employment is generated the rebate will further increase to another 0.50% points. This measure will help in both parameters to improve the overall economy, increase in employment as well as more uptake of the working capital.
Be there no doubt in mind of any Indian that India will be a 5 trillion Dollar economy in the coming year the feeling itself will have a positive impact on the economy of my nation.
Tags : Union Budget