Abolishing tax-exemptions: A step in right direction

Posted Thursday September 17, 2015 by CSLRA India

black-money

Abolishing tax exemptions in India?

It refers to welcome announcement by Union Finance Minister Arun Jaitley that Central government is to gradually abolish various types of tax-exemptions presently given to corporate-sector so as to bring down corporate-tax.

But at the same time Union Finance Ministry should also consider third report of Special Investigating Team (SIT) set up by Supreme Court on aspect of black money wherein it is rightly pointed out towards irregularities detected in name of ‘donations’, ‘charity’ and other such contributions. Already several Non-Government-Organizations (NGOs) have been under scanner for converting black money and hawala-operations. Schools are charging heavy amounts for admission in name of ‘donations’. Charitable trusts are formed with tax-exemption certificates for whitening black money. There is heavy loss to exchequer because of double-edged tax-exemption to political parties which are not complying with full-bench CIC-verdict for being accountable to public through RTI Act.

Best is to abolish altogether provisions under various sections of Income Tax Act for any type of contribution made to anybody. It will effectively check all tactics to whiten black money. Otherwise also huge revenue so earned will be available for public welfare and national development which in no way is less important than contributions, donations, charity and other aspects presently wrongly exempted under Income Tax Act. Tax-exemptions presently available should be reviewed to keep these at minimum like on personal aspects only like interest on home-loan, education-loan, mediclaim, investments in government-schemes etc.

It is time to bring an altogether new Income Tax Act to replace more than half-a-century old Act of 1961 which since has too many patch-works in form of amendments.

MADHU AGRAWAL

(Guinness Record Holder for letters in Newspapers)

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