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Why the Income Tax faces uphill task?

Akhilesh Bhargava

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The FY 2017-18 was a good one for the Income Tax Department (ITD). As against an average increase of 7% to 8% per year, the number of income tax returns filed in India,
increased by about 20% and the gross income tax collections of India crossed Rs.10 lac crores, for the first time ever. This was despite the fact that India’s GDP growth in FY 2017-
18 was patchy and inconsistent, which is incompatible with such growth in the tax returns filed. This growth in tax returns filed looks to be more due to a onetime after effect of
demonetisation/GST and the tightening of the tax laws, than due to a push up in income tax due to all round economic growth that boosts corporate profits. The CBDT reports that due to
demonetisation 2.15 lac persons who had not filed tax returns, have done so, resulting in an additional income tax collection of Rs.6410 crores. The CBDT is also investigating 80000
cases, where individuals deposited cash during demonetisation, but did not file income tax returns. The question is why is the Income Tax facing such an uphill task ? Mr. Akhilesh Bhargava, Business Editor of HW Business and Finance shares his insights on the matter.

Business Tit-Bits

The Diamond Cheats

Akhilesh Bhargava

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We take a look into the glamorous diamond industry in India, said to be the largest in the world. Being a very close-knit one in terms of belonging to a particular community and often only within family members, the scope for manipulation becomes easy. The diamond industry has become tainted with bogus exports, money laundering practices, massive NPAs, round-tripping of money etc. Names such as Jatin Mehta, Mehul Chokshi and Nirav Modi have become synonymous with the industry and hence banks are now restricting their exposure to the sector and implementing tougher conditions for lending money to the beleaguered diamond traders.

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Business Tit-Bits

Why Mr. Jaitley should stop the reckless tax prosecution?

Akhilesh Bhargava

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As many industry and tax associations approach the Revenue Secretary for help to prevent income tax authorities from unfairly harrasing and prosecuting them for minor discrepencies, we ask Mr. Arun Jaitley why is this being done. This culture of “prosecution raj” is hurting small and big businesses alike and is sending the wrong message to India Inc. Giving arbitary powers and setting not only revenue, but also prosecution targets for income tax officers is unfair and businessman are bearing the brunt of this. In addition to penalty and interest, other prosecution punishment is being handed down for the most minor of offences which is leaving a bad taste in the mouth of industry at large.

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Business Tit-Bits

Why the middle-class feels bamboozled with Arun Jaitley’s approach?

Akhilesh Bhargava

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With elections on the cards, it is hardsell time for Mr.Jaitley, as he keeps writing about the achievements, of the five year rule of the Modi government. In one of his recent blog posts,
he says that government has given a Rs.2 lacs crore annual benefit to the middle class, without a single tax being raised. He says that includes the reduction of GST on many commodities, which will make them cheaper, at a loss of Rs.1 lac crore to the revenue. The FM says that since July 2017, the GST on 350 items and 66 types of services has been lowered, such that almost 97.5% of goods now attract GST at 18%. He then refers to the loss of Rs.97000 crores to the exchequer due to the tax rebates on account of small savings investments, PPF, insurance premium etc. and the standard deduction of Rs.40000 given to
all salary earners. The problem is that with all this, why is it that the middle class feels bamboozled with Arun Jailtey’s approach? Mr. Akhilesh Bhargava, Business Editor of HW News Network shares his insights on the matter.

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