Stable Tax System Is Vital: Experts

Mumbai: Experts are batting for a stable tax system in the country, where provisions are not frequently altered, and taxpayers are given adequate time to implement changes.

In recent years, much has been said about the rationalization and simplification of taxes. However, every year, significant and multiple changes are introduced in the tax system, particularly in income tax and GST. These changes not only create confusion among taxpayers but also pose challenges for professionals and department officials, who must invest considerable time in understanding and implementing them.

Talking to Bizz Buzz, Abhishek Aneja, a New Delhi-based tax expert says

“To achieve tax rationalization, it is crucial to have a stable tax system where provisions are not frequently altered, and taxpayers are given adequate time to implement changes. Such measures would bring greater clarity and help reduce unnecessary litigation.”

The rationalization of the income tax is long overdue. While some efforts were made in that direction with a proposed Direct Tax Code, not much has happened post-introduction of a draft. It appears that the thought process currently is to fix the issues within the current enactment rather than bring up a new one. There are several areas in the current enactments that need a fix. But a few quick fixes that can help taxpayers are the rationalization of TDS obligations.

Rony Antony, Partner & Leader, Corporate Tax (South), Tax & Regulatory Services, BDO India says, “Currently, there are multiple provisions in the TDS sections that are creating issues for taxpayers. Rationalization of rates is one area that can help. Additionally, rationalization of provisions to take care of litigious issues that have emerged could help taxpayers with certainty.”

Another area is to curb litigation on matters that have attained finality. With significant amounts stuck in litigation, this poses an issue for taxpayers who want certainty and the tax department that wants to collect taxes, he said.

The Department continues to litigate matters which have even attained finality at the Supreme Court. The government can think of issue-based guidelines to tax department which can curb the scourge of litigation.