Income tax department tells Parliament it has unearthed 1,421 cases worth Rs 2,101 crore in FY2019-20 so far, up from 1,110 cases involving Rs 1,015 crore for 2018-19.
Before govt decides to do either, it needs to take a view about the macroeconomic picture. Is this a time for fiscal expansion, or for fiscal consolidation?
According to the Controller General of Accounts, tax collection until September is 2.6% lower than last year — a sign that slowdown is affecting govt revenues.
G. Parameshwara's confidant Ramesh allegedly committed suicide days after being grilled by IT officials amid raids on the former Karnataka deputy CM's premises.
India cannot be blasé about change in any important capital in the world. Let's look at five key areas where US policy matters for India and how it may vary between Harris and Trump.
In Episode 1544 of CutTheClutter, Editor-in-Chief Shekhar Gupta looks at some top economists pointing to the pitfalls of ‘currency nationalism’ with data from 1991 to 2004.
Troops patrolled up to Patrolling Point (PP) 10 on Monday. Though there are PP 10, 11, 12, 12A & 13 in Depsang Plains, it was decided that only one or two PPs would be patrolled.
While we talk much about our military, we don’t put our national wallet where our mouth is. Nobody is saying we should double our defence spending, but current declining trend must be reversed.
The indirect tax management system ,all bundled into one tax ,though a good idea needs elaborate study by experts ,as it directly
impacts prices and influences consumption.The study should encompass all spectrum of products and its variants, Decision needs to be taken product class wise as well any sub classification India can boast of good system of taxes like excise duty ,sales tax and the like
that paved the way for smooth macroeconomic outputs,be it production or consumption. Some where along the line the thread has been
lost and has led to complex knots and economic downturn.The tax collection has to be often like honey collection by the bee .
The process benefits both the flower and the bee.
Doing business as a small trader has newer been so tough as of now with GST as a dragon on head. My business remains a white collar and since last 2 decades till the end of VAT my tax liability newer crossed 4 lakhs annually. But since GST was forcely applied it has gone upto 8-9 lakhs now. With shrinking profits are volume in sales today my savings are being taken away by the Govt. leaving behind empty hands. Today even paying School fees for the only daughter i have has become a challenge, not to think about a holiday , picnic or Purchases at a shopping Mall. The money I used to earn after all tax liabilities allowed me to purchase medicines, cloths , electronic gadgets and other consumer goods for home on regular basis. Now I rarely visit for a purchase as the wallet is dry and empty only to be filled for the Govt. Tijori. Many countries have experienced rise of Capitalism but the civilian livelihoods were not threatened but Indian Citizens face a daunting task to survive. Instead of making changes in the Income Tax , The GST ratio should be revised immediately to occupy the traders to energize their setups with a new lifeline. 18% GST should be revised to 10-12 % which may bring down the collection down temporarily but in long term once the volume of sales increases with a stable market , this will be covered and perhaps may cross the existing collection targets. The Finance Minister has tried many options but in vain, this may get back the traders on their feet’s and collectively the challenges we face from the international market may be balanced with ease. Let’s hope the Govt. takes a serious note of this.
It’s no brainer that indirect tax (such as GST) is regressive because even the poor need to pay as much as the rich would, for the same product or service. On the other hand direct tax (such as income tax) is progressive since it hits the richer class harder as they earn more. So, there is indeed a case for streamlining the GST rates, which, as I understand, go up and down in India like the stock market indices..
It makes no sense to tax an individual whose annual income is barely Rupees 600,000, which appears to be the living wage in a city. The tax collected from this band of taxpayers is likely to be less than the cost of resources employed to collect it. Or at best it may be even- stevens. Corporation tax collection, another direct tax, which was quite healthy up until now, is likely to go down. In order to encourage enterprise it would make enormous sense to reduce the corporation tax rates further. Income tax rates at the highest level could go up though, taxing those fat cats at the highest income band more.
Expanding the tax base is a good talk, but so, long as the state elections are not aligned with the national one, taxing agricultural income would be a non-starter.
“Tax policies should be decided by the Government, not by the economists.” This is not so in other countries. Taxmen in India, especially GST officers have too much power. The government is clueless on what tax policy to adopt. It is guided by CBIC whose job is to collect more revenue, does not matter if the economy is wrecked in the process. Both in direct taxes and indirect taxes, the tail is wagging the Dog! Change the FM. There is urgent need for this step!
This may not be as simple as it is argued, If argument is that just about 5 crores out of 130 crore Indians are in the income range of upto 12 lacs a year and pay taxes, it does not make sense to reduce Personal Income but instead it makes more sense to reduce GST. It should be noted that GST on items of mass consumption is mostly zero or 5%. So reduction in GST per se will only benefit upper middle classes, if GST is collected and finally paid to the government. Hence, any such alternative will have problem in solving the issue of increasing consumption in short run. Instead, what government should do is to clean and simplify the system- no IT upto 12 lacs of income and remove all exemptions along with moderating IT rates on income beyond this level, have a single or two tier GST for every product or service bought and sold but have a DBT for the poor giving them reimbursement for higher levels of GST paid on items of mass consumption, remove all subsidies and make a DBT transfer in lieu of it etc. Of course, there will be a huge impact on fiscal deficit (dump FRBM for a while!) but we have many many Harvard and other Ivy League universities trained brilliant economists to offer solicited or unsolicited solutions for such an issue! If they can’t give a good advice, then ask RBI to create OD and credit government of India account with the required funds! But give yourself next 3 years and manage this transition. Every economic policy solution has a subsidiary problem but finally, all it needs is a political will to solve even an economic problem!.
If tax collection is to go up, economic activity must expand. If economy is to expand, there should be a great spurt in demand. To create that spurt,
people must have money. Demonetization destroyed that. Botched up GST has really botched up the small and medium business leading to job loss
which in turn impoverished the people. This trend must be reversed. Government must few things: Abolish income tax upto 48 lakhs per annum, Increase the tax upto 80% beyond Rs 48 lakhs to establish an egalitarian society. Have a single GST, say 10 % ad valorem. Raise the interest for senior citizens to 9.5% and enhance the cap for SCSS to One crore with guaranteed interest of 10 % ( tax free). People will have a lot of money in the hand – and their spending will kick start the economy. Prime Minister Modi speaks of US $ 5 Trillion – he can realize that dream only if economy expands. Policy planners therefore must concentrate their efforts to expand the economy. Happiness index of common man will correspondingly go up. Modi can claim that he has ushered in “Aache Din” – which is still a far cry as the matter stands now.
a. k.pattabiraman, chennai
The indirect tax management system ,all bundled into one tax ,though a good idea needs elaborate study by experts ,as it directly
impacts prices and influences consumption.The study should encompass all spectrum of products and its variants, Decision needs to be taken product class wise as well any sub classification India can boast of good system of taxes like excise duty ,sales tax and the like
that paved the way for smooth macroeconomic outputs,be it production or consumption. Some where along the line the thread has been
lost and has led to complex knots and economic downturn.The tax collection has to be often like honey collection by the bee .
The process benefits both the flower and the bee.
Doing business as a small trader has newer been so tough as of now with GST as a dragon on head. My business remains a white collar and since last 2 decades till the end of VAT my tax liability newer crossed 4 lakhs annually. But since GST was forcely applied it has gone upto 8-9 lakhs now. With shrinking profits are volume in sales today my savings are being taken away by the Govt. leaving behind empty hands. Today even paying School fees for the only daughter i have has become a challenge, not to think about a holiday , picnic or Purchases at a shopping Mall. The money I used to earn after all tax liabilities allowed me to purchase medicines, cloths , electronic gadgets and other consumer goods for home on regular basis. Now I rarely visit for a purchase as the wallet is dry and empty only to be filled for the Govt. Tijori. Many countries have experienced rise of Capitalism but the civilian livelihoods were not threatened but Indian Citizens face a daunting task to survive. Instead of making changes in the Income Tax , The GST ratio should be revised immediately to occupy the traders to energize their setups with a new lifeline. 18% GST should be revised to 10-12 % which may bring down the collection down temporarily but in long term once the volume of sales increases with a stable market , this will be covered and perhaps may cross the existing collection targets. The Finance Minister has tried many options but in vain, this may get back the traders on their feet’s and collectively the challenges we face from the international market may be balanced with ease. Let’s hope the Govt. takes a serious note of this.
So you have been fudging taxes before
It’s no brainer that indirect tax (such as GST) is regressive because even the poor need to pay as much as the rich would, for the same product or service. On the other hand direct tax (such as income tax) is progressive since it hits the richer class harder as they earn more. So, there is indeed a case for streamlining the GST rates, which, as I understand, go up and down in India like the stock market indices..
It makes no sense to tax an individual whose annual income is barely Rupees 600,000, which appears to be the living wage in a city. The tax collected from this band of taxpayers is likely to be less than the cost of resources employed to collect it. Or at best it may be even- stevens. Corporation tax collection, another direct tax, which was quite healthy up until now, is likely to go down. In order to encourage enterprise it would make enormous sense to reduce the corporation tax rates further. Income tax rates at the highest level could go up though, taxing those fat cats at the highest income band more.
Expanding the tax base is a good talk, but so, long as the state elections are not aligned with the national one, taxing agricultural income would be a non-starter.
“Tax policies should be decided by the Government, not by the economists.” This is not so in other countries. Taxmen in India, especially GST officers have too much power. The government is clueless on what tax policy to adopt. It is guided by CBIC whose job is to collect more revenue, does not matter if the economy is wrecked in the process. Both in direct taxes and indirect taxes, the tail is wagging the Dog! Change the FM. There is urgent need for this step!
This may not be as simple as it is argued, If argument is that just about 5 crores out of 130 crore Indians are in the income range of upto 12 lacs a year and pay taxes, it does not make sense to reduce Personal Income but instead it makes more sense to reduce GST. It should be noted that GST on items of mass consumption is mostly zero or 5%. So reduction in GST per se will only benefit upper middle classes, if GST is collected and finally paid to the government. Hence, any such alternative will have problem in solving the issue of increasing consumption in short run. Instead, what government should do is to clean and simplify the system- no IT upto 12 lacs of income and remove all exemptions along with moderating IT rates on income beyond this level, have a single or two tier GST for every product or service bought and sold but have a DBT for the poor giving them reimbursement for higher levels of GST paid on items of mass consumption, remove all subsidies and make a DBT transfer in lieu of it etc. Of course, there will be a huge impact on fiscal deficit (dump FRBM for a while!) but we have many many Harvard and other Ivy League universities trained brilliant economists to offer solicited or unsolicited solutions for such an issue! If they can’t give a good advice, then ask RBI to create OD and credit government of India account with the required funds! But give yourself next 3 years and manage this transition. Every economic policy solution has a subsidiary problem but finally, all it needs is a political will to solve even an economic problem!.
If tax collection is to go up, economic activity must expand. If economy is to expand, there should be a great spurt in demand. To create that spurt,
people must have money. Demonetization destroyed that. Botched up GST has really botched up the small and medium business leading to job loss
which in turn impoverished the people. This trend must be reversed. Government must few things: Abolish income tax upto 48 lakhs per annum, Increase the tax upto 80% beyond Rs 48 lakhs to establish an egalitarian society. Have a single GST, say 10 % ad valorem. Raise the interest for senior citizens to 9.5% and enhance the cap for SCSS to One crore with guaranteed interest of 10 % ( tax free). People will have a lot of money in the hand – and their spending will kick start the economy. Prime Minister Modi speaks of US $ 5 Trillion – he can realize that dream only if economy expands. Policy planners therefore must concentrate their efforts to expand the economy. Happiness index of common man will correspondingly go up. Modi can claim that he has ushered in “Aache Din” – which is still a far cry as the matter stands now.
a. k.pattabiraman, chennai
“Rs 8-12 lakh a month” . . . ?