| Why common man pays more tax in India? |
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| Written by Site Administrator |
| Wednesday, 14 October 2009 09:51 |
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A Chartered Accountant has recently pointed out that there are many problems with the tax system in India. The Common Man (Aam Aadmi) here pays much more than the 30% as projected by the rules. If a person gets Rs. 6 lakhs as gratuity at the end of his working life, a tax of upto Rs. 2.5 lakhs out of this is deducted from this amount. Considering gratuity, which is the money earned over the entire career as capital receipts is such an anamoly. People running businesses in India pay heavy penalty to the stock exchange for various lapses. They are not allowed to claim this amount in deduction. What is more, they also pay taxes on this amount ending up being charged double. Tax exemption limit of Rs. 1.5 lakhs is not linked with inflation. As a result though you are allowed to keep an exemption amount, you end up paying some amount of tax for it due to inflation. The Captial gains concept in a way is not mature enough yet. Tax Refunds / Income Tax Returns have not been improved Income Tax department has spent enough money for automating systems for collection taxes in every way possible. However, when it comes to Returns, the process still runs at a snail’s pace. Taxes are deducted automatically (TDS) from salaries, but returns when filed may take one or two years to be refunded to the tax payer’s account. Problems with e-filing E-filing process has been made mandatory now. However, there a lot of confusing factors in this. The process is still not fully automated, as you are asked to send a signed copy of your acknowledgement to their processing unit in Bangalore. Again, you can send it in a secure manner by registered or speed post. As a result you don’t know if they received your acknowledgement. One fine day two or three months after e-filing, you get an e-mail saying they have not received your acknowledgment yet. You send it once again keeping your fingers crossed. Your returns which they promise would come to you in four months would be delayed further. Comments (0) |