New Simplified Income Tax Returns for all
The Indian Government on Tuesday notified the new set of Income Tax Return forms for assessment year 2015-16, where the details of foreign trips need not to be disclosed and also proposed income tax benefits for individuals who make payments through debit and credit cards. The key points are,
- The card companies have been asked to remove transaction charges on card payments at petrol pumps, gas agencies and for railway tickets.
- The high value transactions of more than Rs 1 lakh are possible hereby only through electronic mode, to reduce tax avoidance.
- Tax benefits in terms of income tax rebates to be considered by consumers for paying a certain proportion of their expenditure through electronic means
- An appropriate tax rebate can be extended to a merchant if at least say 50 per cent value of the transactions is through electronic means. Alternatively, 1-2 per cent reduction in value added tax could be considered on all electronic transactions by the merchants.
Does the mandatory electronic transaction help every citizen of India? Undoubtedly yes. Every citizen by e-transaction for a certain amount of his expenditure will have tax benefit and also freed from the extra charges levied by bankers and service providers. Merchants will benefit through a reduction in VAT. The black market will never evolve.
e-transactions are the safe and secure way to build cashless and black money free economy and are easier to track whereas cash exchange cannot be tracked. Hence the job gets easier for the government to curb illegal money. Moreover, paper cash has its own cost for manufacturing, printing and keeping it secured.
In future, there may be a day where income tax will be debited automatically every year from every bank account with respect to the account balance one holds, thereby making nobody avoid paying tax. Larger the money you deal with, larger be the tax. So, the proposal made by the finance ministry is undeniably a good attempt for a prosperous future.