Saral for common man, easy for India Inc

For more than anything else, Jaswant Singh’s Budget will be remembered for the simplification of the tax-paying procedures. The Budget ...

For more than anything else, Jaswant Singh’s Budget will be remembered for the simplification of the tax-paying procedures. The Budget 2003-04 has introduced a host of administrative reforms in the tax-paying process based on the recommendations of the Kelkar’s task force.

Apart from the introduction of the one page tax return form for individual tax payers with effect from April 1, 2003, the Budget also announced reduction in the compliance cost of the tax-payers by reducing the numbers of forms presently used in the furnishing of applications, returns etc, for the purpose of tax deduction and tax collection at source. The number of forms has been reduced from 42 to 22.

Jaswant makes it easier now
• One page tax return form for individual. • Less number of forms for tax deduction and tax collection. • Outsourcing of allotment of PAN. • Better service for taxpayers through voice response system. • IT Act to be amended for electronic filing of returns. • direct crediting of refunds to bank accounts of taxpayers. • Simplification of search and seizure procedure. • For India Inc excise duty can be paid at the end of the month instead of fortnightly payments. Story continues below this ad

As was suggested by Kelkar, the Budget has proposed to outsource a host of non-core activities of the income-tax department including allotment of PAN and creation of data bank of high value transactions through tax information network. The present system of discretion-based system for selection of returns for scrutiny will be replaced by a computer generated intelligent random selection of only 2 per cent of the returns annually.

Tax-payers can also hope for better service as the Budget has proposed to extend the interactive voice response system and the software for preparation of returns to more cities.

Further, tax-payers may not have to wait long to receive their cheques for refund as the Budget has proposed direct crediting of all refunds to the bank account of the tax-payers through electronic clearance system. The Income Tax Act will also be amended to enable electronic filing of returns. The administrative reforms will also do away with certificates required for persons leaving India or people submitting a tender for the government contract. Citizens before leaving the country will only be required to provide the PAN and the period of his visit abroad to the emigration authorities.

The Budget has also proposed to simplify the search and seizure procedures of the I-T department. Stocks found during search and seizure will not be seized. No confessions will be obtained during search and seizure operations and further no survey operation will be authorised by any officer below the rank of joint commissioner of income-tax. Books of accounts impounded will not be retained beyond ten days without the approval of the Chief Commissioner.

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For the India Inc, the Budget has proposed to liberalise the present system of fortnightly payment of excise duty to permit payment of duty at the end of the month. Further, the excise duty will be considered to be paid on the date the cheque is presented subject to realisation. Deduction from transaction value allowed on actual freight has been proposed to be extended to cases where freight is worked out on an equalised basis.

At a Glance
• Income tax and corporate tax rates remain same. • Standard Deduction for the salaried raised to 40% of salary or Rs 30,000 (whichever is lower) for income up to Rs 5 lakh and a deduction of Rs 20,000 for those above Rs 5 lakh. • Fiscal deficit pegged at 5.6% of GDP at Rs 153,637 crore. • Debt swap scheme between State and Centre to prepay high cost debt. n Total expenditure estimated at Rs 4,38,795 crore of which Rs 120,974 crore is for Plan and Rs 317,812 crore for non-Plan. • 5% surcharge levied last year for country’s security halved to 2.5% while for individuals there will be no surcharge. • Individuals with income of over Rs 8.5 lakh to pay 10 per cent surcharge towards security of the country. • Introduction of one-page form for individual tax payers, having income from salary, house property and interest. • Abolition of tax clearance certificates currently need by a person leaving India, or any person submitting a tender for a government contract • LIC to launch monthly pension policy for senior citizens above 55 years with return of 9% per annum • SSI reservation withdrawn from 75 items • Antodaya Anna Yojana scheme to be expanded to cover additional 50 lakh families • Three-tier excise duty structure of 8, 16 and 24 proposed • 48 new road projects at an estimated cost of around Rs 40,000 crore • Leave Travel Concession (LTC) for government employees restored • Interest on PPF and small savings schemes reduced by 1% • Dividends made tax-free • Service tax enhanced to 8% from 5%

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