Trust your countrymen-min
One of the greatest drawbacks of our Finance Act is that it is formulated on the presumption that those who earn income don't want to pay tax unless they are forced to do so. Due to this flawed presumption, the Act concentrates more on sticks than on carrots to collect tax from the tax payers
This being the last budget of the incumbent government, expecting major reform measures in the budget was foolhardy. Of course, there were some path breaking statements but they were more on the side of populism like world’s largest healthcare scheme covering 100 million poor families. In this case also apprehension is whether we have enough resources in terms of manpower, that is, doctors, and properly functioning hospitals and health centres to manage healthcare scheme of that magnitude.
Though our Finance Act needs major re-hauling none of the Finance Ministers till date have done anything major in this regard. And it was too much to expect something spectacular in this regard from a Finance Minister of the caliber of Mr Jaitley.
One of the greatest drawbacks of our Finance Act is that it is formulated on the presumption that those who earn income don’t want to pay tax unless they are forced to do so. Due to this flawed presumption, the Act concentrates more on sticks than on carrots to collect tax from the tax payers. Take the case of Section 43CA which was inserted by Finance Act 2013, which provides for considering valuation assessed or assessable by any authority of State Govt. for the purpose of payment of Stamp Duty as the value of consideration received or accruing as a result of transfer of an asset being land or building or both, by the assessee. Stamp duty is generally calculated on valuation of asset based on circle rate fixed by State Govts, which are in many cases higher than the market value or the value negotiated between seller and buyer. But this provision has put lot of genuine buyers in lot of avoidable hardships.
Today, in a depressed market condition, one of the deterrents for real estate prices to find their real market value is Ready Reckoner rate. This is the greatest deterrent for the market forces to decide real estate prices. The government itself has admitted in its economic survey that the realty sector is passing through dull phase and sales have come down drastically. But the prices have not fallen down proportionately thanks mainly to Ready Reckoner rates. Whatever concession the Finance Minister has given in the latest budget may not help in changing the ground reality.
Also, the budget has given step-motherly treatment to middle class population and salaried people. Deciding the tax concessions by comparing the per assessee tax collection is foolhardy. If that had been the case, highest tax concession should be given to the largest tax payers which is not the case anywhere in the world. Remember, there are least number of tax disputes in case of salaried class who also pay their tax much in advance than the rest of the payers. They deserved a better treatment than the one meted out to them in this budget.
One thing these lawmakers should always remember that this country is and will be saved only by the honest tax payers and they don’t bother what the Finance Minister says on February 1st.