Ten Points to simplify Income Tax Act

The Income Tax is one of the ways of taxation through which evolved one of the concept of assessment of ‘black’ & ‘white’ money. Efforts are on to simplify & extend scope at the income-tax laws so as to make the scheme of income-tax, simple and tax-payers friendly. The following may prove to be useful for the purpose:

(i) The difficulties in the operation of Income Tax Act, i. e., problems of income-tax assesses should be outlined clearly with a view to identifying the reasons as to why people do not want to pay income-tax/ become income-tax assessees, etc. The system of Assessment Year/ Financial Year should be changed to one as it causes many practical problems.

(ii) The experts making the law should take into account the valuable decisions of the High Courts and Supreme Court on various controversial sections of the Income Tax Act to make it more precise and understandable by the tax-payers.

(iii) The best way to increase the effectiveness of the Income Tax Act will be to enhance the area of TDS provisions at various levels and by advertising the benefits of becoming a tax-payer and vice-versa. However, the TDS rates should be kept at lower levels so as to remove blockage of hard-earned money of taxpayers as well as to lessen the burden of refunds. Harsh rules and heavy penalities in respect of TDS defaults may be redefined.

(iv)The method of getting the information and its use without leakage too needs redefining.

(v) The tax-payers friendly schemes should be introduced to bring more persons under the Income Tax Act.

(vi)Honest as well as high tax-payers should be honored/ rewarded so as bring among them the sense of pride.

(vii) Legislatures be entrusted with the task of only making laws, exact position of the law come from the courts. Therefore some degree of latitude may be given to the appellate authorities so that assessees get genuine reliefs from them.

(viii) Wide powers (in respect of applying their discretion) have been given to the assessing officer under the Income Tax Act. To remove any misuse, a boundary line should be chalked-out in different sections of the Act.

(xi) To clear the pending income tax demands (alongwith interest) a compounding scheme may be introduced.

(x) Computerisation and full automation is the thrust today. Many demands arise due to centralization of the datas and mismatches of the entries for which practical and necessary guidelines should be issued from time to time. At the offices of income-tax and while making this, regard must be had to the proper sitting arrangements for counsels & their clients.