Ahead of Budget 2020, FM Hints at Relaxed Norms for Income Tax

With Budget 2020 hovering over India’s economy, Finance Minister Nirmala Sitharaman has hinted at some massive reforms. “I have gone through this with a comb. We are working to decriminalize companies and ensure no other Acts, including Income Tax and PMLA, have such provisions,” she said.

Crux of the Matter

1. Ahead of Budget 2020, FM Sitharaman has hinted at decriminalizing Income Tax Act and Corporate Laws. The move, if made, will abolish the criminal provisions pertaining to penalty and jail.

2. She also emphasized on reforming tax dispute settlement mechanisms. FM said, “Nearly 95% cases are closed. About Rs. 35,000 crore has been settled. The total value of cases was over Rs. 2 lakh crore. There is another 5% cases which didn’t opt for the scheme, and they will be fought in courts.”

3. Government is working towards technology-enabled dispute resolution mechanisms, in which there would be no “face-to-face interaction” with the tax authorities.

4. FM acknowledged that privatization had not been carried out optimally and that the government is making efforts towards rapid privatization so as to put India on the path of $5 trillion economy.

5. Sitharaman affirmed that Corporate Social Responsibility (CSR) violations would not be treated as criminal offenses but as civil liability. India Inc. has welcomed this move as the one giving breathing space to corporates.

Curiopedia

Penalties in Income Tax Act – There are various penalties & fees which can be levied as per the Income Tax Act, 1961. Some of the important penalties and fees are: a) Penalty under section 271(1)(c) for either concealment of income or for furnishing inaccurate particulars of income b) Penalty u/s 270A for under reporting or misreporting of income; and c) Fee u/s 234F for late filing of ITR. More Info

Penalties for Violating CSR Norms – According to the amendments in the Companies Act, companies violating CSR norms could face a monetary fine from Rs. 50,000 up to Rs. 25 lakh. Violating Company’s officials could also be imprisoned for up to 3 years. More Info

Curated Coverage

1. The Hindu – Indian Inc. welcomes move to decriminalise CSR violations

2. Financial Express – $5 trillion economy: Here’s what govt doing to achieve the goal by 2024

3. Livemint – Government to de-criminalise Income Tax Act, anti-money laundering law: FM Nirmala Sitharaman

#CSR #FinanceMinister #IncomeTax