High Value Transactions- Govt. New Proposal To Widen Taxbase
1. INTRODUCTION
“No. of taxpayers are significantly low with only 1.5 Crore paying taxes out of 130 Crore people” Hon’ble PM Narendra Modi said while launching platform for ‘Transparent Taxation’- on 15th August 2020. The Post in twitter handle on same day revealed a fresh set of expenditure items to be traced by Income-tax Department.
2. Proposal To Add 11 New Transactions In Form 26AS
1) Education related fees and donations above 1 lakh in a year.
2) Electricity bills of above 1 lakh in a year
3) Domestic business class air travel or foreign travel.
4) Hotel bills above Rs.20,000/-
5) Purchase of jewellery, white goods, paintings, marble, etc. above Rs.1lakh. White goods includes Electronic Products i.e. TV, Refrigerator, Washing Machine.
6) Deposits or withdrawals above 50lakhs in Current Accounts.
7) Deposits or withdrawals above 25lakhs in Non-Current Accounts.
8) Payment of property tax above Rs.20,000/- per annum.
9) Life Insurance premium above Rs.50,000/-.
10) Health Insurance premium above Rs.20,000/-.
11) Share Transactions, Demat account and bank lockers.
3. Proposal For Compulsory Filing Of Income-Tax Returns
1) By those having bank transactions above 30lakhs.
2) All businesses having turnover of more than Rs.50lakhs
3) Payment of rent above Rs.40000/- pm.
4) Deduct TDS at higher rates for those who do not file income-tax returns.
Govt. has to take certain steps to ensure higher filing of returns and payment of taxes. But at the same time it should ensure that it does not forces any person to file return or explain their expenditures when their income is below taxable limit. They may make hotel bill payments or pay travel bills from their accumulated savings. Govt. should trace big ticket transactions incurred by higher income earning persons rather than tracing transactions with smaller values which results in unnecessary problems for middle class and lower middle class persons.