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Future of tax system in india

When people are talking about New DTC and GST, recently on the news I came to see Baba Ramdev ji advising to withdraw all the Tax and bring a single Bank Transaction Tax. Since he is a Yog Guru, I am not sure how much he knows about tax and economics. But this issue has been raised many times in the past too. Mr Nitin Gadkari also advised the same but his party was not with him. I understand that it is not very easy in india to withdraw taxes due to dirty politics. But whatever, being in finance and tax field i understand that tax is required so that Govt. can serve us and develop our country. After all the tax paid by us is ultimatley used for our benefits only (assume no corruption). But I too agree that the tax system is more complicated in india than need. This creats doubts in my mind.

1) Whether it is practically possible that simple tax system may be followed or all the taxes like income tax, excise, customs, vat can be withdrawn and a single tax can be introduced? (ignore the political interference)

2) Income tax is levied everywhere in the world except UAE? Then how this country gets finance for its developments? Donation or else?

3) It is many times said that there is shortage of CA's but the Fresher CAs who are unemployed brings a different picture. And If Future of tax is so uncertain, then it will further affect the demand for CAs. Whether the future of CA is also uncertain since tax services being (ok not everything) but major souce of revenue for CAs?

My doubts may not be justified but it will be helpfull if you share your view on the above matters.



 10 Replies

@*CS Siddharth Bumb. *

@*CS Siddharth Bumb. * (B.Com, CA Final, CS )     09 January 2014

Hello,

It is quite difficult to introduce a single bank transaction tax in India.. Our tax system and other laws are based on after studying other country's laws. 

Frankly speaking many laws are just like copy and paste..

If other countries are not having banking transaction tax system them it will be much difficult to introduce new tax system in India.

Income tax, companies act 1956, customs act, service tax etc are came in India because other countries are following those tax systems... 

Chill budddyyyy... we are CAs, we are having safe place in the country...

 

 
Deepshikha Agrawal

Deepshikha Agrawal (Student)     09 January 2014

I agree with Himanshu ji at some point since the tax is uncertain concept. Also regarding future of CA, recenetly when Arvind Kejriwal asked for C&AG audit for electricity co., it creat doubt on audit report of CA. But the good news is that Political Interference (sorry you asked to ignore)in india which will note let the Tax be withdrawn so easily, as Himanshu Ji also said.

I also agree with Himanshu ji regarding decreasing demand for CA. And one of the reason for this is increasing no. of students in CA. ICAI should either make B.com or equivalent only as eligibility for CA or should 12 the pass with minimum 55 or 60 % as eligibility for CA.

Mihir

Mihir (Wealth Manager)     09 January 2014

It is not possible. It will never be approved in the parliament. Our current tax system may have many flaws but it is the most comprehensive tax system in the world. Nobody wants the current tax system to go; we all want transparent tax system. 

Mittal Darji

Mittal Darji (student)     10 January 2014

I agree with dipsikha ji., ICAI should have strong eligibility criteria for CA entrance.. & himanshu sir I think it is not possible to have single tax system right now due to our complicated tax system , single tax system will also raise questions regarding income distribution between state & center.
Deepshikha Agrawal

Deepshikha Agrawal (Student)     10 January 2014

I don't understand why students are so crazy about CA. There are many other options like CMA, CFA, CPA, CS, CIA, CFAP, CFP, LLM etc.

Bharat bhushan

Bharat bhushan (Chartered Accountant)     10 January 2014

@ Deepshikha agrawal CAG also includes ca`s.It is a appropriate step tken by mr.kejiriwal to appoint CAG for audit of ELECT. CO. Bcz CAG is formed only for purpose of audit of govt. Entities & CAG is an independent body a firm of CA can b biased bt CAG Never.It is also vry time consuming process to appoint a ca firm for audit.
sonu

sonu (service)     10 January 2014

1. single or easy tax structure country like us which follows a democratic form. people have to contribute funds to.run it. these funds are collected.in form.of tax revenues. at the same time multi form.of tax creates complexity and which leads to evasion of taxation. having a single form of tax would be a ideal case. but where a coubtry with diverse form.of income and complex structure. its becomes a difficule task. therefore direct and indirect form of collection is good form. however we should have minimum number of layes below them will be good. GST is one of it in indirect tax and correct way to processed. this will bring easyiness in process and better regulated. taxes like octroi, service tax and others should be abolished.. all taxes requirement should be covered under this unberalla of tax. so that all adther to the tax requiremrnt of return. Income tax is another one.. wealth tax, should go. in this complex.struture should go.. like one suggesyion on showing income under business income should be done.under llc or company format.. no huf, individual business should be their...if any person wants to do business he should register as a llc/ltd co. cess, edu cess, should go off.. its just allocation of funds and its internal managemrnt of tax collecting authorirites to manage funds. on collection sources all these should.go off as its irrelevant. 2. countries like uae.. a non tax country.. we.should not compare our revenues to.such a country as they have different model.. there are certain basic.difference. a. they are a country under monarchy b. main sources of income.is oil or tourism c. expatriat popilation.. local poplution is merely 15% of total population. d. further they give money to local population if they have more child.. they give them free house e. they only need some.money to.run their adminstration which they cillect it from fines and visas fees and salik
rakesh

rakesh (manager)     11 January 2014

the queries are right but it depends on govt so the govt must think on it by considering interest of all people
Nishad

Nishad (student)     11 January 2014

To be frank Inidan Govt Charges various taxes on us but we never get the answer where all the tax money is utilised.

 

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