Income Tax Act to be replaced by Direct Tax Code: Chidambaram
NEW DELHI: The government must replace the income tax law with the direct tax code as it claims to have abandoned all old inheritances, former finance minister P. Chidambaram said on Monday.
Participating in the debate on the Appropriation Bill and Finance Bill 2022 in the Rajya Sabha, he said that the IT Act has 298 articles if one does not count suffixes like ABC to articles and 14 schedules and from many amendments have been made to the previous provisions.
Reiterating that the government should replace the computer law with the direct tax code, he said that articles 11 and 12 of the law, which provide exemptions for charity, are so burdensome that anyone will say that instead of doing charity, it will pay the taxes because the sections are getting more complicated from year to year.
“If you really think trusts and charity have a place in this country, let them operate with a reasonable degree of independence and light regulations, because there are binding provisions that don’t allow charity,” the member of the Congress.
He also stated that the concept of accumulated income is very regressive, because if the exemption is canceled under section A12A or 12AA, all of the exempt income from the last few years is now considered accumulated income and will have to be paid tax on this.
About the “faceless assessment”, Chidambaram said that in earlier systems, the officer knew the background of the assessed person, had all the records and all the knowledge, but in this system, no one knows who the agent is.
New provisions in the finance bill state that if an income escaped assessment, officials, instead of three years, can now review the income up to the last 10 years, he said, adding that it is a regressive provision and leads to create difficulties and a lot of disputes.
Manoj Kumar Jha, member of the RJD, said that prosperity does not flow, but poverty. He also raised the issue of privatization of public sector companies and rising unemployment in the country, while NCP’s Praful Patel called for a more aggressive fight against cryptocurrency and perhaps used it as a tool to attract ordinary people by crooks.
BJP’s Sushil Kumar Modi has praised Finance Minister Nirmala Sitharaman for a 30% surcharge on cryptocurrency revenue, which he called “gambling”, “lottery” and “a type of horse racing”. and called for even higher taxes in the future, citing that Japan had a 55% tax on cryptocurrency earnings.
The Shaktisinh Gohil of Congress questioned the tax provisions of the bill as well as the retroactive application of these provisions. Noting that it is proposed to increase tariffs for solar energy to 40%, he asked the government how this will help the country to develop green energy.
The debate remained without issue and will be resumed on Tuesday, accompanied by the response of the Minister of Finance.