CAPITAL
GAINS :-
At present, the Government does not get enough revenues from Capital
Gains due to Indexation and the assessee has to show tax next year
at the time of filing return or the assessee has got option to invest
monies and save income tax.
The alternative suggestion for capital gains for immovable property
is :-
At present, a purchaser pays about 12% on stamp duty and Registration
charges on sale price of immovable property when he registers the
sale-deed with the authority. The capital gains tax can be recovered
at the rate of 5% on purchase price, minus 1985 price at the time
of registration of document. The Sub-Registrar, registering the
document can recover 5% of tax from the seller and he will be willing
to pay the amount as he is to get entire amount with him without
compulsion to invest amount in order to save tax. Similarly, ½%
tax can be levied in transfer of Shares, Mutual Funds and Cars from
brokers or registering authorities. The Central Government can recover
Capital Gains immediately during the year through officers of State
Governments, which can be adjusted towards the share of each State
from direct taxes.
DEPRECIATION
AND EXPENSES :-
In India, a businessman and the Professional purchase the car at
the entire expenses of the Central Government. Mr. A. purchases
the car before 30th September. He gets 20% of the value of the car
as depreciation and he gets depreciation every year till the value
is zero. If he sells the car after three years, and gets more value
than the written-down value (after three year's depreciation) additional
value is treated as income and added in his total income.
He is entitled to keep one car or two cars or more cars and he is
entitled to claim depreciation on each one and he claims entire
interest amount on loan taken by him for purchasing the car.
During the accounting year petrol bills and repairs are claimed
as deductions, even though for most of the time the car is used
for personal use.
In filling the form, he claims depreciation, the interest paid on
loan, petrol and repair bills and out of grace he deducts 1/6th
amount from expenses and petrol bills for his personal use. The
import bill of petrol, diesel and its product is about 40% of total
import bill and poor and ordinary people have to suffer and pay
price of exporting essential things of life in order to earn foreign
exchange. It was estimated in one article that car Company utilizes
Rs.7,000 crores as import bill for the manufacturing and far reaching
amendments are necessary in order to increase the revenue receipt
by restructuring the depreciation on cars and restructuring the
car expenses of petrol/diesel.
Following formula may be considered which can increase the revenue
receipts by limiting percentage of depreciation and by allowing
car expenses and petrol bills.
-
Depreciation should be reduced to 10% from 20% depreciation.
-
Depreciation should be taken every year till the value of the
car is reduced to 50% of the original purchase price.
-
Thereafter, the reaching 50% value of the car no depreciation
should be allowed.
-
Above suggestion is made only to control the black money which
is created by sale of the car after using for 3-4 years.
-
Only one car should be allowed instead of number of cars at present
for the purpose of loan, depreciation and expenses.
-
Out of total expenses, only 50% of expenses should be allowed
as car is used for personal and family use.
-
Only 50% of Interest should be allowed on the same grounds.
HOUSING
INTEREST LOAN :-
The interest on Housing Loan should be allowed as deduction upto
Rs.50,000/- per year.
TAX
HUF :-
Tax HUF at 30% maximum rate without any exemptions including exemption
limit of Rs.60,000/-. HUF will make necessary arrangements if HUF
is taxed at 30%.
Hindus should not have privilege of tax planning on the ground of
religion only.
"The
Black Money in India" By Arun Kumar has relied on the report
of C.A.G. of India for the year ending March, 1997 has given figures
of assesses, who are paying Direct Taxes :
Individuals 97,61,426
HUF 41,247
Firms 11,58,319
Companies 2,27,228
Trusts 49,629
Others 34,471
-----------------------------------------
1,16,43,543
================================
It seems that above number is of assessees, who are actually paying
Direct Taxes.
There are lacs of assessees, who are filing forms but do not pay
tax in view deduction under section 80L and rebates under Section
88, 88B and 88C and Standard Deductions. There may be thousands
of HUF, who are not paying tax in view of above exemptions and rebate.
On deletion of deductions and rebates, every assessee will contribute
some amount of tax to the Central Government.
ALLOWANCES
:-
There are three types of wages (1) Living Wage (2) Fair Wage (3)
Minimum Wage. The Fifth Central Pay Commission has recommended scales
of Living Wage for Central Government employees. The commission
had stated that Dearness Allowance is not given in foreign countries
as it increases inflation. Still Dearness Allowance was given at
12% pay in 1998 which is now increased to 59% of pay.
The following perquisites allowances are not taxable either under
the executive instructions of the Central Board of Direct-Taxes
or by virtue of specific provision in the Act/Rules :-
-
The provision of medical facilities
-
Refreshment provided by an employer to all employees during working
hours in office premises.
-
Free meal provided by the employer during working/business hours
or through paid non-transferable (usable only at eating joints)
vouchers if value thereof in either case does not exceed Rs.50
per meal.
-
Free meal provided during working hours in a remote area or an
offshore installation.
-
Amount spent on training of employees or fees paid for refresher
management course (including boarding and lodging expenses).
-
Goods (manufactured by the employer) sold by the employer to his
employees at concessional rates.
-
Perquisites allowed outside India by the Government to a citizen
of India for rendering service outside India.
-
Leave travel concession.
-
Transport facilities to railways or airline employees.
-
Free telephone(s) including mobile phone(s).
-
Payment of annual premium by employer on personal accident policy
effect by him on his employee.
-
Reimbursement of expenses in respect of car (which is owned by
employee and used for personal and official purpose) (amount not
taxable is upto Rs.1,200 per month for car having engine capacity
of not more than 1600cc, Rs.1,600 per month for car of above 1600cc
and Rs.600 per month for driver).
-
Free educational facility provided in an institute owned/maintained
by employer to children of employee provided cost/value does not
exceed Rs.1,000 per month per child (no limit on children).
-
Interest-free/concessional loan of an amount no exceeding Rs.20,000/-.
-
Gift-in-kind of upto Rs.5,000 in a year.
-
Computer/laptop given (not transferred) to an employee for official/personal
use.
-
Transfer without consideration to an employee of a movable asset
(other than computer, electronic items or car) by the employer
after using it for a period of 10 years or more.
-
Accommodation provided on transfer of an employee in a hotel for
not exceeding 15 days in aggregate.
-
Accommodation provided in a 'remote area' provided to an employee
working at a mining site or an onshore oil exploration site, or
a project execution site or an accommodation provided in an offshore
site of similar nature.
-
Interest free loan for medical treatment of the nature given in
rule 3A.
-
Initial fees paid by employer for acquiring corporate membership
of a club.
-
Use of health club, sports or similar facility provided uniformly
to all employees by the employer.
-
Periodicals and journals required for discharge of work.
-
Rent-free official residence provided to a judge of a High Court
or of the Supreme Court.
-
Rent-free furnished residence (including maintenance thereof)
provided to an official of Parliament, a Union Minister or a Leader
of Opposition in Parliament.
-
Conveyance facility provided to High Court Judges under Section
22B of the High Court Judges (Conditions of Service) Act, 1954
and Supreme Court Judges under section 23A of the Supreme Court
Judge (conditions of service) Act, 1958.
-
Conveyance facility provided to an employee to cover the journey
between office and residence.
-
The value of any benefit provided free of cost or at a concessional
rate by a company to its employees by way of allotment of shares,
debentures or warrants (directly or indirectly) under the Employees
Stock Option Plan or Scheme in accordance with guidelines issued
by the Central Government.
29. Tax on perquisite paid by employer (applicable from the assessment
year 2003-2004).
Suggestion
Allowances :-
-
Give the amount of allowance after the deduction of 10% of Income
tax. When a bill is submitted for the allowance, Give the amount
of bill after deduction of 10% of tax.
-
L.T.C. should be discontinued.
-
There are number of allowances which can be discontinued.
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