Why Progress ? Taxman is waiting.
The recent announcement by Government about Long Term Capital Gain (
LTCG ) tax on gains made in Stock Market is just an extension of whatever has
been going on for last 4 years.
The objective of Government is to garner more revenue so that the ever increasing Government expense can be met. Also, to fund numerous schemes which are announced before every state election.
It is a welcome move to bring all transactions thru banking channel and to widen taxpayers base.
However, there is a need to look into situation thru the taxpayers view.
The individual who has been engaging himself in Govt or private service. Another option is to have own business. All these people have been engaging Chartered Accountants to find ways and means to minimize tax liability. Lower tax liability is required for every individual as they need to save some money for building house , marriage and other functions and health care etc. Lower tax liability is required for businessman to become competitive in market domestic and international. There is efficiency involved in every profession. Prudent use of raw material, machines churning out quality products with minimum rejection and productivity of workforce. Similarly one has to undertake exercise of energy conservation etc.
In order to be efficient one has to have lower tax liability. Individual planning small saving schemes, equity linked saving schemes and planning home loan to lower tax is regular feature. Those who did it lowered their tax liability and those who did not ended up paying tax.
Now Government wants to ensure that tax is collected somehow for every transaction.
Salaried people receive their salary after payment of Income Tax and there is no possibilty of making this liability NIL. As salary slab increases their tax liability increases. Now if some money is saved from whatever has come to hand they try to rotate money in stock market. This is to meet higher expenses to some extent as fixed interest instruments do not offset inflation fully.
Now Government wants to tax gains made in stock market as LTCG @ 10 %. If individual makes losses in stock market is Government going to reimburse the same ?
The money which is rotated is all tax paid. Now again there is tax on the same.
Today if you see situation from common tax payer point of view any money rotation he does he is taxed. If you go out and buy any goods or services you need to pay GST. There are 2 items which were outside perview of GST i.e. Petrol and Liquor. State Government has had field day and taxed Liquor heavilly. Government is also mulling putting GST on petrol. This will benefit petroleum companies but common man will end up paying more. If you make any expensive purchase like Car , House etc. There is GST liability. Today any payment beyond Rs 15 lacs invites incometax notice.
It seems someone is all the time ' watching ' you and if anyone steps out of house he is taxed immediately.
If you decide to not to spend money and keep in bank then also interest income gets added to your income increasing tax liability further.
The question here is unless you have any advantage in making progress you will not do the same. If people are taxed all the time they will not circulate their money in the system which will not generate any employment and nation will not remain progressive.
The recent massive fall in Indian Stock Market is indication of What is in people's mind.
The objective of Government is to garner more revenue so that the ever increasing Government expense can be met. Also, to fund numerous schemes which are announced before every state election.
It is a welcome move to bring all transactions thru banking channel and to widen taxpayers base.
However, there is a need to look into situation thru the taxpayers view.
The individual who has been engaging himself in Govt or private service. Another option is to have own business. All these people have been engaging Chartered Accountants to find ways and means to minimize tax liability. Lower tax liability is required for every individual as they need to save some money for building house , marriage and other functions and health care etc. Lower tax liability is required for businessman to become competitive in market domestic and international. There is efficiency involved in every profession. Prudent use of raw material, machines churning out quality products with minimum rejection and productivity of workforce. Similarly one has to undertake exercise of energy conservation etc.
In order to be efficient one has to have lower tax liability. Individual planning small saving schemes, equity linked saving schemes and planning home loan to lower tax is regular feature. Those who did it lowered their tax liability and those who did not ended up paying tax.
Now Government wants to ensure that tax is collected somehow for every transaction.
Salaried people receive their salary after payment of Income Tax and there is no possibilty of making this liability NIL. As salary slab increases their tax liability increases. Now if some money is saved from whatever has come to hand they try to rotate money in stock market. This is to meet higher expenses to some extent as fixed interest instruments do not offset inflation fully.
Now Government wants to tax gains made in stock market as LTCG @ 10 %. If individual makes losses in stock market is Government going to reimburse the same ?
The money which is rotated is all tax paid. Now again there is tax on the same.
Today if you see situation from common tax payer point of view any money rotation he does he is taxed. If you go out and buy any goods or services you need to pay GST. There are 2 items which were outside perview of GST i.e. Petrol and Liquor. State Government has had field day and taxed Liquor heavilly. Government is also mulling putting GST on petrol. This will benefit petroleum companies but common man will end up paying more. If you make any expensive purchase like Car , House etc. There is GST liability. Today any payment beyond Rs 15 lacs invites incometax notice.
It seems someone is all the time ' watching ' you and if anyone steps out of house he is taxed immediately.
If you decide to not to spend money and keep in bank then also interest income gets added to your income increasing tax liability further.
The question here is unless you have any advantage in making progress you will not do the same. If people are taxed all the time they will not circulate their money in the system which will not generate any employment and nation will not remain progressive.
The recent massive fall in Indian Stock Market is indication of What is in people's mind.
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