Salaried is the class which is mostly neglected by any FM and this was proven again after removing the standard deduction. I wish to start with few suggestion for the honorable tax payer group but also included few suggestions to bring more revenue and avoid loop holes.

1.       Standard Deduction to salaried people - should be reintroduced - when deductions are allowed for genuine expenditure under all other heads why not for salaries. If this is not able to quantify - then why not to allow standard deduction like in House Property.

2.       Few expenses should be allowed as deduction to these people, which are incurred for performing the duties For Example: Professional Development Expenses (need not be against allowance as like available now) - if a professional incurs expenditure on higher education/ magazines/fees etc., allowing the same as exp why not for a salaried professional - why this deduction should be out of allowance given by the employer? This should be removed and professional employee can claim irrespective of allowance receipt based on submission of proofs.

3.       Notice Pay Deduction to Salaried People: Notice pay amount paid directly/indirectly is taxable as of now. This is very non-sense, when a professional/business person can claim expenditure incurred to increase the income, why not a salaried guy?? The salaried person will incur this costs in order to earn more which is subjected to tax - then why deduction should not be allowed for this genuine expenditure.

4.       HRA - Rent payments - need to strengthen - in practical to avoid tax salaried people are going for higher/fake rental receipts - to curb this it may be restricted that deduction is allowable only paid by cheque if higher rent claimed (say Rs. 20,000) further the rental agreement should be registered quoting PAN copy of the owner.

5.       LTA -  controls need to be bought into the purview of employer: After SC ruling there is a high ambiguity going on to stop and curtail any misuses, law may be amended and bring into purview of employer.

6.       Sodexo/Meal Cardspayment need to be strengthened: Most of the companies paying without any maximum limit, which need to be specified.

7.       Individual Tax Slabshas to consider overall income of the family/number of dependents on the income- At present income tax slabs doesn't consider the income earners and dependents there is no relation to the slabs. Tax will be deducted equally from a single earner in a family with more dependents Vis a Vis more earners without any dependents. Ex: Wife & Husband will get basic exemption though both are earners. Compared a single earner with so many dependents also get the same exemption. This needs to amended and some relief should be given to the individuals having a single earner and so many dependents. Just to inform so many countries deduction will be allowed for dependents in the family.

8.       Separate limit for long-term savings Vs short-term savings: 80 C limit may be increased and allow a sub-category where benefit can be given only for long-term savings (say 10years like PPF) in order to improve the savings habit on individuals which is required when there are no proper social security schemes available.

9.       TDS - no penalty for PAN requirements- if PAN is not provided by the vendor, the same is punishable and penalty will be levied on the deductor without his mistake!!! how rude it is . Interest for delayed filing (minimum criteria not met) and penalty for non-filing are other non-sense clauses need to be removed/ simplified.

10.   TDS - Fix time limit -for asking the details -if AO wishes he can ask the details even after 10/15 years which should not be allowed. When the assessee is not required to keep the records more than 8years for his own taxation, it won't make sense to ask him to maintain records for infinitive period on account of TDS.

11.   TDS certificates (Form 16A) for non-salaries can be allowed to sign digitally - At present digital signature is acceptable for TDS certificates of salaries (Form 16) the same needs to be extended to Form 16A also - to bring down the burdens. Though our FM is promising to remove the physical certificates requirement, this is keep postponing and at least as a temporary relief this should be allowed.

12.   Some benefit to Large TDS deductors - some relief (like raised by some of our professional colleagues) to the large tax deductors may be in the form of waiver in NSDL charges/ other incentives (like commission on TDS deduction & payment -why not when it is the business practice like collection charges commission etc.,) should be provided.

13.   Amalgamations/Mergers/Demergers etc., benefits extend to all companies: At present amalgamation/merger/demerger provisions of income tax are applicable allowed to Industrial Undertakings only which needs to be extended to all companies-  why to restrict to only Industrial undertakings? Why not be extended to service sectors and other companies (trading, investment etc.,) especially when it is recession times this allowance (carry forward of loss, depreciation etc., benefits) should be allowed to non-industrial companies also. It is funny that when there is a change in major shareholders b/f depreciation is allowed,  but the same will not be allowed when there is a demerger (no change in major shareholders).

14.   Service Tax - why need to pay under so many challans and heads?? Why can't service provider pay consolidated amount and show the details in the return. This is being followed for VAT and as per recent changes for income tax as well. So, atleast now CBEC has to simplify this process.

15.   Central Excise: There are provisions for manufacturer/dealer. But in case of importer/Depots of Mfg/importer/dealer - though they are allowed to pass on CENVAT credit, this is not bought into registration purview and so much ambiguity on this front which needs to be removed.

It may be observed that above suggestions are not industry/person specific and common in nature, which hopefully be taken care in view of large tax payers interest.

 

With Best Regards

Bindu Madhav

BDM (Finance)

SHV Energy Private Limited

8-2-334, Road No.7, Banjara Hills

Hyderabad - 500 034

---------------------------------

Ph:+91-40-23540079

Fax:+91-40-23540083

Mobile:+91-9848673873

Standard deduction reinstatement for salaried taxpayers to allow employment expense claims and reform TDS procedures. Reinstate a standard deduction for salaried taxpayers and permit deductions for employment related expenses such as professional development and notice pay independent of employer allowances; strengthen HRA verification and payment rules, bring LTA under employer oversight, limit meal card benefits, and introduce family sensitive tax slab treatment and a long term savings subcategory within existing limits. Expand merger and demerger tax benefits to non industrial companies, and reform TDS procedures by removing deductor penalties for vendor PAN failures, imposing time limits for requests, allowing digital Form 16A signing, plus simplifying service tax payments and clarifying central excise registration for importers and depots.