Nagpur: Nag Vidarbha Chamber of Commerce (NVCC) is the leading and apex body of 13 lakh traders of Vidarbha and the Chamber always acts as a bridge between the business community by coordinating with government and non-government organizations for the benefit of the public.
Chamber President Ashwin Aggarwal (Mehadiya) said in a report sent to the Finance Ministry that keeping in view the economic interests of the business community, the Chamber has been sending suggestions and reports to the government from time to time. The budget for the year 2023-24 is going to be presented by the Ministry of Finance in the coming month of February. Therefore, the following relief should be given to the general public in the upcoming budget. He said that the Chamber has been demanding for a long time to increase the exemption limit from the provision of income tax on personal income. Keeping in view the interests of small and medium businessmen and employed persons, the following relief should be given in personal income tax for annual income:
Annual income up to Rs 5 lakh — Full exemption
Above Rs 5 lakh and up to Rs 10 lakh — 10%
Rs. 10 to 20 lakh annual income — 20%
For income above Rs 20 lakh – Income tax should be fixed at the rate of 3% and also various income tax rates should be changed according to the new provision U/s 115BAC. Also, it is proposed to change the rates of surcharge and U/s 87A to individual taxpayer should be given exemption for annual income of Rs 5 lakh.
Arjundas Ahuja, Chairman of the Chamber’s Board of Directors, said that the government has fixed 25% income tax rate for companies and 30% income tax rate for partnership firms. Like small companies, the government should make the income tax rate 25% for partnership firms also. Under the provisions of Income Tax 44AD, the partners in the partnership firm should be exempted from income tax on their honorarium from the firm and also on its interest.
Chamber Secretary Ramavatar Totla said that under the provisions of 234A, 234B and 234C of Income Tax, the taxpayer has to pay interest on various provisions of Income Tax. Due to which the traders have to go through the lack of liquid capital and the traders have to pay huge amount of interest due to delay in payment of advance tax and due tax payment. Therefore, the government should give relief to the general public and businessmen by re-assessing the rates of payment and interest under provisions 234A, 234B and 234C keeping in view the economic conditions of the present market.
Chamber’s Vice President Farooqbhai Akbani said that sometimes the taxpayer has to face a lot of problems due to wrong assessment by the assessing officer. In such a situation, the assessing officer and the department, while accepting the responsibility of the wrong assessment, should compensate the taxpayer for the financial and mental suffering caused. According to section 36(1) of the National Pension System (NPS), the taxpayer has to pay 10% of his salary, while at present the Central Government has increased it to 14%, so make uniformity in the rules of the National Pension System (NPS). To keep it again only 10% should be done.
The Convenor of the Direct Taxes Committee of the Chamber, CA Sandeep Jotwani said that at present the rate of Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT) is 18.% which is very high which should be reduced to 10%. At present, in view of economic recession and lack of liquid capital, the government should provide relief to industries and traders by changing the provision of Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT). Along with this, to encourage savings, the government has made necessary changes in the provision of income Tax 80C and 80D and increased its minimum limit to Rs 3,00,000. Limitation of income tax on salary should be increased from Rs 50,000 to Rs 1 lakh.
According to the provision of income tax return, taxpayers have to e-verify the income tax return in 30 days. Due to non-availability of all technical means for e-verification with all the small and medium traders, they are not able to e-verify the income tax return, due to which the department declares their return invalid. Therefore, keeping in mind the problems of such businessmen, the department should provide an opportunity to e-verify the income tax return even after the deadline.
Chamber’s executive member CA Ashwini Aggarwal said that at present the purchase or construction work of any property has not been completed within 5 years. Interest subvention is available on loans up to Rs 2 lakh. This exemption should be extended to 2 years even after the prescribed time limit period. Government should allow 125% reduction in research expenditure to encourage Indian IT sector companies to compete with countries like UK, Australia and Canada.
Chamber’s executive member CA Umang Agarwal said that presently agricultural land is taxed under MAT U/s 115JB at the time of transfer whereas agricultural land does not come under capital asset. Therefore, transfer of agricultural land should be kept out of tax assessment. Under Section 79 of Income Tax Act, 1961, the time of completion of tax under business loss should be increased from 8 years to 12 years. According to Section 270A, at present the penalty imposed once cannot be abolished, the government should remove the penalty imposed according to Section 270A and amendment should also be made in Section 273B, if there is a proper reason, while giving relief to the taxpayer. 47(xiiib) of Income Tax Act, 1961, there is a lot of difficulty in conversion of LLPs to companies, therefore the limitations of the provision of conversion of LLPs to company form should be reconsidered.
Chamber member CA. Yash Verma said that necessary compliances of MSME units like:- TDS/TCS of Income Tax, RCM of GST etc. should be excluded. Relief should be given in deemed dividend rules (section 2(22e) of Act). In order to keep the assessment transparent and fair, if any wrong order is passed by the assessment officer by mistake, then the mental and financial loss caused to the taxpayer should be compensated by the department.
Convener of the Indirect Taxes Committee of the Chamber, CA Ritesh Mehta said that day by day the rules and provisions of tax compliance are becoming stricter due to which taxpayers are facing a lot of difficulty in claiming ITC. Therefore, simplification should be done in its provisions. The time limit for tax appeals should be increased from 90 to 180 days and the appellate authority should be empowered to waive off in genuine cases deserving relief. Different rates of GST should be abolished and only 2 to 3 rates should be implemented. Fixed rules for GST assessment and audit should be made and assessment should be done by the assessing officers only under that. The rate of interest in delayed payment should be reduced from 24 to 6%. The work of GST registration and refund should be completed in at least 3 working days.
It has been over 5 years since GST was implemented. So to settle the pending cases of GST in one go, the government has introduced VAT type GST. Traders should also be provided relief by bringing Abhay Yojana.
Treasurer Sachin Puniyani said that the present small and medium taxpayers do not have all the technical means available due to which they face a lot of difficulty in doing faceless assessment. Hence Rs. Faceless assessment should be made mandatory for taxpayers whose annual turnover is more than 50 crores. Due to which the burden of faceless assessment and e-assessment on the administrative department will also reduce. Under the Finance Act, the Central Government has made arrangements for the Income Tax Appellate Tribunal (ITAT) to deal with the cases of faceless assessment. To make this effective, the government should settle small cases in ITAT and gradually bigger cases should also be included in it.
The NVCC requested the Union Finance Minister Nirmala Sitharaman and the Central Government that the small and medium business class is an important component of the economy, which plays an important role in the country’s economic prosperity and strength by increasing the country’s revenue by collecting taxes. Therefore, in the upcoming Union Budget 2023-24, keeping in mind the above suggestions given by the Chamber, relief should be given to the general public and businessmen and the way the government announces a relief package for the farmers and the working class, similarly the small and medium business class Prosperity package should be announced to encourage them.
