As per reports The Income Tax Act is to be re-written for simplification and better compliance. The irony with the government is that to simplify tax matters it makes it most complicated perhaps keeping in view loss of revenue or thinks all citizens are dishonest as regard to taxes! The fact is that the overall total tax burden of all the taxes – a citizen pays is perhaps highest in India. And in turn citizens do not get required / expected services from the government.
Recall simplifying Income Tax – an attempt was being made by the previous government to simplify Income Tax by introduction of Direct Tax Code so that common income tax payers can easily understand it and comply with it. But the truth was otherwise.
The Direct Tax Code, 2013 Bill had 325 clauses, 21 chapters and 23 Schedules. Could a common citizen make anything out of this voluminous Code-Sections and Schedules? There should not be more than 50 to 60 Sections. Than it would have been supplemented by Income Tax Rules to be framed later which becomes part of that Bill too. With the passage of time, there are always more of Income Tax Rules, Clarifications, Circulars, Notifications etc., besides Court decisions on DTC too. Income Tax Laws shall always remain some faux paus for the taxpayers and government too. The services of tax practitioners and chartered accountants shall always be needed for all taxpayers till there is Income Tax in India!
For easy compliance of Income Tax, the forms must also be simplified like One Page Saral for all the taxpayers. Last but not the least exemption limits under all sections / rules are too low an amount considering high and continuous rising inflation in the country-raise them to a practical and realistic levels.
GST is generating good amount of tax, why not abolish income tax in toto? If this dream of citizens becomes true than the government’s motto to have minimum laws (taxes) and maximum governance!
