The statement and motive of government to introduce a simple taxation system by not allowing any special deductions and taxing the receipts without set off any house instalment interest etc, will have adverse impact on the economy, as small savings have been one of the strength of Indian economy, these savings were done mostly by peoples in India because of the its tax benefits, with introduction of such new proposal for flat taxation with no encouragement for savings will hamper the saving habits of the people.
Reduction in corporate taxation to 15%, which is almost half of the MMR as in case of individuals. Further removal of Dividend Distribution Tax removed and adoption of classical system of dividend taxation will put an added burden on the HNI, along with complexities in case of TDS requirement for corporates on such dividends.
Increase in the threshold limit for audit under Income Tax, has been increased for business houses. Extending benefit of Income based exemptions to the startups by raising their turnover limits. Differentiation has been created in time limits for filing the Audit Reports and Return filing to the business houses.
In overall assessment when we can say that government is working towards reduction of compliances, but the management of the same by introduction and withdrawal of tax benefits would have adverse effect on the economy.”
About Vivek Mehta:
Vivek is Experienced Associate with a demonstrated history of working in the law practice industry. Skilled in Taxation Law and Audit. Strong professional with a Forensic Auditor focused in Forensic Audit and Fraud Prevention from The Institute of Chartered Accountants of India.