Budget Wish List 2009

BUDGET WISH LIST

       While I make my Budget wishes I am reminded of an Urdu couplet by Ghalib," Hazaaron Khwaishen aisi ke har khwaish pe damm nikle, Bahut nikle mere dilke armaan, lekin phir bhi kamm nikle".[ Thousands of desires, tantalizing one and all, Many a wish have I realised; Yet I yearn for more ]. From the many a budget wishes, I would press for only a few.

       Section 44 AB of the Income Tax Act provides for compulsory audit of accounts by a Chartered Accountant if his total sales, turnover, or gross reciepts in business exceed Rs.40 Lakhs [ Rs 10 lakhs in case of profession ]. This provision  for compulsory audit was introduced long back and is in force for more than 20 years. There is no revision in the limits since then. There is a strong case for increasing the limit to Rs. 1 crore in case of business & Rs 25 lakhs in case of profession having regard to the over all growth of the Indian economy. Such a revision would save compliance cost and effort on the part of the relatively smaller assesses.

       It is a common knowledge that the Income Tax Department subjects the tax payers with high income/turnover to repeated scruitiny assessments/survey u/s 133 A/ search u/s 132. Normally these excercises are a curse on the honest tax payers. It would  certainly make sense if the Budget evolves a mechanism so as to widen the tax base and add new tax payers so as to increase tax collections rather than thrive on the existing tax payers. Punish the Guilty and Befriend  the sincere and honest should be the guiding principle in this regard. 

       "Works contract service" is now subjected to service tax. A Composition of Tax scheme was formulated in respect of this service and the rate of service tax in such case was 2 %. However this rate was revised to 4 % which is very high. It is highly desireable that the same is reduced to 2 % having regard to the fact that the general service tax rate is reduced to 10 % from 12 %. Another reason for such reduction is to avoid the cascading effect as the works contracts are also subjected to VAT under the state laws.

       These Budget wishes if granted and implemented would certainly go a long way in creating a tax payer friendly environment which is very much the need of the hour.