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Only CAs, lawyers gaining from present Income Tax laws: Chidambaram
Taking part in the debate on the Appropriation Bill and Finance Bill in the Rajya Sabha, Chidambaram quipped that “no one benefits from this Income Tax Act except the chartered accountants and the lawyers”.
Former finance minister P Chidambaram on Monday urged the government to replace the existing Income Tax Act by Direct Taxes Code and raised doubts over 11.2% nominal GDP growth projections, saying the war in Ukraine has blocked supply chains and some sectors have seen major price hike.
Taking part in the debate on the Appropriation Bill and Finance Bill in the Rajya Sabha, Chidambaram quipped that “no one benefits from this Income Tax Act except the chartered accountants and the lawyers”.
He cited Section 10 (23)(c) in the Income Tax Act that runs over eight pages and said the “clause is being amended by (a) Bill where Sub-Section 23 (c) alone occupies nine pages”.
“A day will come when a charity or a religious institution will say, ‘let us get out of these clutches of the Income Tax Act and pay the tax’. Most charities and trusts today are crippled by these provisions and the repeated amendments year after year,” the senior Congress leader said.
Union finance minister Nirmala Sitharaman is expected to reply to the budget debate on Tuesday.
Chidambaram also tried to find loopholes in the ‘faceless assessment’ system of the tax authorities. Comparing with the earlier system in which an officer knew all records of an assesee, the former minister said: “We don’t know who the assessing officer is. We don’t know whether he has all the past records of the last 20 or 30 years. We don’t know what assistance he gets. How is this improvement?”
He added that reopening of files beyond three years and up to ten years is a regressive amendment and “defeats the purpose for which you reduced the time limit to three years”.
Expressing concern over the economic impact of the Russian invasion of Ukraine, he said: “Supply chains have been choked. The shipping rates have gone up astronomically. There is a chip shortage. There is a shortage of containers. There is a shortage of credit. World trade will be affected. In fact, the IMF has estimated that the GDP of every country will be down by 0.5% to 2%.”
“Given all these developments in the last eight weeks, are you (finance minister) still confident that your nominal GDP will indeed grow by 11.2% (in 2022-23)… I don’t wish ill. I wish growth at 11.2%. But I have serious reservations that whether in the changed circumstances in the year beginning April 1, it will actually grow at 11.2%,” he added.
