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Wednesday, June 07, 2006
Not So Saral Income Tax for Mulayam Singh Yadav The Mulayam Singh Yadav case is symptomatic of high profile celebrity tax evasion that routinely makes it to the headlines and then fades away into the dark recesses of public memory. The truth in the Mulayam Singh Yadav case will be known eventually as the Indian Supreme Court gets to the bottom of his wealth, however coming in the background of the new income tax rules there is a legitimate question if the tax enforcement regime has its targets right. On the one hand is this public scrutiny of the affairs of individuals like Mulayam Singh by the highest courts in full glare of the media and on the other hand is the faceless middle class tax payer who will if the tax department has its way with the new form, would pretty mortgage his or her privacy to the government. While it pleases the many to see high profile celebrities and powerful politicians dragged to courts, are these cases de-ligtimising ethical acquisition of wealth ? While the tax department maybe legitimately concerned about tax evasion by a few wealthy is this kind of detailed accounting of expenses to the government an unnecessary burden on the middle class and a violation of right to privacy ? Questions such as these rarely get much of a political audience or public debate given that the salaried middle class is not the biggest of political constituencies for the major political parties to worry about. However given the contribution the income tax payer makes to the overall revenues of the government, there is a legitimate concern in the minds of the middle class tax payer and there is barely a murmur of protest on behalf of this constituency. The Income Tax regime in India has evolved over the years from one laden with exemptions and deductions to one with a fairly simplified structure. It has also adopted technology to bring further traceability into the flow of money by requiring government issued Identities to be required for a sizeable transactions. The elimination of Long Term Capital Gains Tax on securities transactions was a major positive step forward. However with the new income tax form which is not so Saral the government seems to have taken a setp backward. The tax department is not just requiring individuals maintained detailed accounts of their expenses and transactions but is also requiring them to be disclosed with no limits to the extent to which the government may probe them. This kind of intrusion into individuals lives by the Government is unwarranted. The private citizen should be under no obligation to detail out his or her expenses to the Indian Government as long as he or she is honest, law abiding and pays his or her income taxes at source. By raising the level of accounting to be provided to the government, the Taxman is not only snooping into private affairs of citizens but is also equating the vast majority of salaried tax payers with few celebrity evaders and is delegitimising the ethical acquisition of wealth through their chosen professions. For years the overwhelming socialist attitudes in India reflected in government policies and popular cinema have made a virtue of poverty and a vice of wealth. The 21st century has thrown open opportunities that allow the ethical acquisition of wealth by the working class which have not just boosted standards of living but have catalyzed economic activity through increased consumer spending. While greater transparency in the tax system through the application of technology is a welcome change, this regressive move by the Income Tax Department is a huge disappointment and a step backward. The Indian Income Tax Department must respect individual's privacy and achieve its objectives with better use of technology rather than shift the burden of transparency and the needle of suspicion to the middle class salaried tax payer who is not only making an honest contribution to the Government's revenues but is also demanding very little back from it by way of entitlement. The Indian Income Tax Department must respect the ethical acquisition of wealth and not let its instruments of tax collection become hostage to anachronistic socialist attitudes. -- OffStumped For All Things Right of Center, Bringing a Right of Centre Reality Check to Indian Politics, News Media Reporting and Opinion through Blogs and Podcasts. -- Blogger News Network is advertiser-supported, and your visits to our advertisers help BNN to meet its expenses. Help keep us afloat! posted by Yossarin at 9:03 PM |
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