When it comes to losing weight, baby steps towards your goal are what finally amount to a big change for you.
The banking, taxation and in the financial segment of India has seen a lot of baby steps implemented in the past couple of years and these indicate a path towards big change.
A few changes are the much discussed tax related reforms announced during the year 2015.
Here is a look at the 5 new tax reforms that have been introduced by the Finance Ministry in the year 2015, and how they have been helping people with their day to day financial goals.
Revised Income Tax Return Forms
The Finance Ministry has been slowly making changes for long term tax reforms. As part of this process, the first step being taken is the revisal of income tax return forms. Earlier this year, a new form running into several pages was introduced. Later, this was reduced to an easy to use three-page form.
The new forms known as ITR 2 and ITR 2A consist of only 3 pages, making the whole process of tax filing easy and simple for the common man. Any further details that an individual may need to attach along the ITR form can be filled in a schedule instead of the original ITR form.
Service Tax Hike
A move that was not so welcome by the common man this year is the hike of Service Tax. As part of the economic reforms, the Government has increased the Service Tax rate from 12.36% (including education cess) to 14%. Though the announcement was made during the Union Budget, it came into effect from 1st June 2015.
While the increase in Service Tax has made all services expensive for you as a consumer, it will help the Government to generate more revenue, and facilitate a smooth transition to the Goods and Services Tax (GST) regime.
Birth of Sevottam, the Tax Grievance Resolution System
The resolution of many genuine grievances at the Income Tax Department is at long standing queue as of now. After active monitoring of this by the Prime Minister himself, the Central Board of Direct Taxes (CBDT) is now working overtime to ensure that all pending cases are resolved at the earliest.
The Income Tax Department has set up its internal online platform known as Sevottam, connecting all Income Tax offices in the country. The details of each consumer grievance will be updated in the platform every day. There will be day to day monitoring by the department on this, to ensure that grievance resolutions are fast and time bound.
Tax Incentives of E-payments
A unique tax reform that the Finance Ministry is working on actively now is the proposal of offering tax relief to shopkeepers as well as consumers for using the digital payment system. Shop keepers will be incentivized if their sales exceed a minimum threshold limit for card transactions. As of now many business establishments, including shopkeepers, prefer cash transactions over card or any other electronic form of payment. The excessive use of cash is seen as one of the reasons for a bustling illegitimate parallel economy.
This new proposal will not only establish digital transactions, it would also help in clamping down on black money and fake transactions. The offer of tax incentives to both users and shopkeepers makes it a win-win situation.
Passing of the Black Money Bill
The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill 2015, commonly known as the Black Money Bill, has been passed by both the houses of parliament earlier this year. The Bill allows the Government to take strict action against anyone found guilty of stashing illegal wealth abroad. As per the bill, any person concealing income and assets held in foreign countries can face rigorous imprisonment of up to 10 years along with a penalty of 300 per cent of taxes on the concealed income and assets.
Any big reform is always made up of many small reforms. The Income Tax Department along with the Ministry of Finance has introduced many small but meaningful reforms this year, which will go a long way in making a stable taxation system in the country. Perseverance and patience are required to stick to the path to big change, even if you don’t particularly like it much.