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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.

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Business Tit-Bits

Is Chhota Bhai favouring Bada Bhai?

Akhilesh Bhargava

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Bada bhai Mukesh Ambani bailed out Chhota bhai Anil Ambani by cutting a cheque of ₹ 480 crores as outright payment on behalf of RCom to Ericsson. Anil Ambani thanked his brother and publicly acknowledged his generosity. Another problem still persisting for RCom is the ₹ 46,000 crores due to lenders led by SBI who were unwilling to release an amount of ₹ 266 crores of refunds to RCom. The issue of sale of assets of RCom to RJio came to an end with both companies announcing to terminate the sale which was pegged at a value of ₹ 18,100 crores. With no other option for RCom, it must now go into insolvency proceedings and the value of its assets will deteriorate and be available for a much cheaper price. With no worthwhile competitor, RJio seems like the only one to pick up the assets of RCom at a throwaway price, which will benefit Mukesh Ambani by thousands of crores.

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What is the story behind RCom and BSNL?

Akhilesh Bhargava

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The flamboyant Chairman of Reliance Communications, Anil Ambani, has been held guilty of contempt of court by the Supreme Court and now faces a prison term of three months if he does not cough up an amount of ₹ 453 crores to Swedish telecom equipment maker Ericsson. The company had no luck in trying to convince its lenders led by SBI to release an income tax refund of ₹ 266 crore to help it pay part of its dues. With no plan in sight, it will be interesting to see how the debt ridden telecom operator manages to keep its promoter and two other top executives out of jail. Another telecom operator, although from the public sector, BSNL, is struggling to keep afloat. With a highly bloated staff and continuously making losses, the company needs a capital infusion of 14,000 crores, in spite of receiving ₹ 7,500 crores by the government just two years ago. With an employee base of almost 2,00,000 no government would be wanting to shut it down. However, firms such as these must go into liquidation in order to stop wasting public money.

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Is China the terror godfather?

Akhilesh Bhargava

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It was on 14 th February that India lost over 40 of its brave soldiers in a dastardly terror attackat Pulwama in Kashmir. The Jaish e Mohammed (JeM), the Pakistan based and sponsored terror outfit quickly claimed credit for it, and its terror mentor and head Masood Azar, vowed many more such attacks against India. The world denounced this brazen terror attack, except its sponsor Pakistan and Pakistan’s sponsor China, who made hypocritical comments. In a statement issued on 21 st February, the UNSC condemned it, which China supported reluctantly. The question crops up, is China the godfather? Mr. Akhilesh Bhargava, Business Editor of HW News English, shares his insights on the matter.

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