The 14th Prime Minister of India made two promises to his country. First of all, Narendra Modi plans to root out the hardened system of corruption. Secondly, he vowed to revive the weak national economy. The latter objective might soon benefit of an overdue renewal of the old Income Tax Act. The main positive effect will be to increase low incomes in a decade.
India’s Economy Has Currently $153 Billion Assets Frozen Due to Litigations
Prime Minister Narendra Modi is currently working on tweaking tax laws to work to the benefit of taxpayers. The main changes Indian citizens might soon experience will be a drop of multiple return submissions and faster ways to redress in case of error. The new draft might be ready as soon as the start of 2018.
At the moment, India’s economy is suffering much. The main culprit seems to be the ancient words of the law that slacken market fluidity. Current tax rules that dictate the financial activity are not suited for modern times. On top of that, the language gives way to numerous interpretations which brings chaos to the system.
As a consequence, around 10 trillion rupees or $153 billion are frozen due to litigations. Therefore, this year’s second quarter recorded a three-year low economic performance of 5.7%. According to executive director at Khaitan and Co. tax consultancy organization, Daksha Baxi, India is far from having the highest tax rates in the world. This incriminates only the broken system for the country’s slow economic drive.
The Next Draft of the Income Tax Act Will Incorporate Modern Processes and Technology
This isn’t the first time when the government pursuits a revamp of the ancient Income Tax Act. However, previous attempts failed due to lack of support in parliament. Modi’s administration plans to modernize the text and link the law to technology.
Therefore, taxpayers in India might soon receive emails from the tax office instead of a tax official to visit households. On the other hand, citizens will be able to open appeals online rather than waiting in queues at the government. These are just a few examples of the improvements tax laws are going to receive.
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