The important and noteworthy changes in the Direct Tax structure are as below:
On an in-depth analysis of the Direct Tax reforms made by Mr. Mukeshbhai(Direct Tax consultant and expert), the current 2009 Budget reforms consists of "Ironical contradictions and missed opportunities".
Let us first know some essential points here. Firstly, out of the total expenditure being made by the Government, 30% is Plan Expenditure and rest 70% is Non-Plan Expenditure! An expectation of a 20-20 inning was expected by the nation, but it seems, 50-50 hasn't vanished away till now! Following are the points I have deciphered on this topic:
1). Taxation is a KEY to make an "aam aadmi" happy, an Income Tax exemption limit is such that it makes out to be a saving of Rs. 1000/year for general citizens an Rs. 1545 for Senior citizens. Come on Pranabda, an increament of Rs. 4/litre of Petrol will make them spend many a 1000 bucks in a year!
2). Fringe benifit Tax has been removed, a good move indeed.
3). As per CBDT(Central Board for Dirct Taxes), Wealth Tax collection was Rs. 400 crores last fiscal(125 of total Direct Tax revenue). Do we really need to undertake so complex processes to collect a tax of just 300-400 crores?
4). A lack of REAL-TIME relief is there. Educational sector could have been given a relief by reducing the interst rates on students' loan.
5). MAT(Minimum Alternative Tax), mainly formed to make the once-popularly known "Zero Tax Companies", has been increased to 15%. Is it justified? See, it was first started at 7.5%, then increased to 10% and now a jump to 15%!
Thus, majorly these are the areas I felt I shall share it with my readers. Growth was a goal, these reforms are somewhere obstructing that goal. Let us hope, the road map made here in the Union Budget, turn out to be better in terms of efficiency and relief. Some points further, I would lik to share are that the Surcharge has been removed, L.L.P.(Limited Liability Partnership) has newer reforms good enough for now atleast. And lastly, it should now be noted that you may not have a "PEN" but you certainly must have a "PAN"(card). Lets hope for a brighter future. Do share your views.
Bhagirath Baria
- Bhagirath Baria
- The Author of this blog has keen interest in understanding Economics and its implications on the Individual and the Economy as a whole. Has been writing articles and analysis of issues that may skip general observation, but exert deep influence on people's lives and their decisions. Discussions and Debates related to conventional as well as non-conventional Economics is done here. The author of this blog doesn't classify himself to any particular School of thought in Economics. He is tilted toward Mainstream Economics, though has keen interest in a few Heterodox schools too. Wishing all the readers a truly enriching experience.
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