The Finance Bill 2017 – For Your Own Good Or Up To No Good?

By BankBazaar | April 22, 2017

The Finance Bill 2017 – For Your Own Good Or Up To No Good?

On March 22nd 2017, the Union government pushed the Finance Bill 2017 through, which immediately raised eyebrows all across the country not because of any sort of convoluted, technical jargon, but because of the manner in which it was passed as well as its scope.

The Finance Bill 2017 will have a direct impact on at least forty laws that are currently in existence, making its passing practically unparalleled in the annals of Indian governance. Strangely enough, the bill has put forward potential changes that will go through without a Rajya Sabha vote to contest it.

Additional Reading: Union Budget 2017: What You Need To Know

Being a money bill, the Finance Bill 2017 could have immense ramifications on every Indian citizen in the near future, with experts in many quarters vocally expressing their disdain at the way it was passed and the consequences such a bill could bring in its wake.

While this may all sound very doomy and gloomy, we’re going to try and detail the different provisions that the bill entails by presenting both the pros and cons that could either make you nod your head in agreement or furiously wipe the sweat from your brow.

1) Income Tax Raids

For many people, the mere mention of an income tax raid is enough to send them into a frenzy. That is unless, of course, you’re a law abiding citizen and you pay your taxes on time, every time.

In any case, the Finance Bill 2017 states that the IT department no longer needs to furnish any sort of reasons when carrying out an income tax raid. According to the bill, an individual will not be permitted to object before a tribunal or authority if a tax raid has been carried out by the IT department, nor will an individual be permitted to contest any taxation assessments.

On one hand this may seem a bit over the top, considering it gives the IT department full authority to randomly raid and persecute even those who pay their taxes and follow the law to a T. However, on the flip side, it could jolt tax evaders into filing taxes and declaring undisclosed income in order to avoid falling foul of the law.

Additional Reading: 5 Commonly Overlooked Ways You Could Save On Tax In 2017

2) Seizure of Property

As we continue to delve into George Orwell territory, the Finance Bill 2017 also states that the government can seize any property, regardless of whether an inquiry has been carried out on it by the Income Tax department or not.

And if that doesn’t get your eyes bulging out of your sockets, it also states that the government can attach the property of an individual for a period of up to six months. Unfortunately, it doesn’t exactly mention how an individual can get his or her property back after the six months period has lapsed, nor does it make any mention of whether the government will safeguard said property during that particular period.

Creepy as it may sound, this could also be seen as a way to clamp down on shady real estate deals that seem to be a constant thorn in the country’s economic belly.

Additional Reading: Tax Implications For Property Buyers And Property Sellers

3) Inspection of Charities

Why go after charities you may ask? Well, it isn’t beyond the realm of imagination that charities have and continue to be used to hoard black money under the guise of donations and gifts.

According to the Finance Bill 2017, the Income Tax department now has the right to investigate or survey any charitable organisation. While some experts say that this law could lead to unnecessary harassment, others say that it could ultimately prove to be a deterrent when it comes to the hoarding and concealment of black money.

Additional Reading: 5 Ways You Can Give Even When You Receive

4) Tough on Tribunals

While this may or may not impact every Indian citizen directly, the Finance Bill 2017 states that the government now has the power to either appoint or remove the heads of various administrative panels. It also gives the government free reign when it comes to governing and formulation of rules regarding the terms of service of members of up to seventeen administrative panels.

In fact, it doesn’t just stop there. The bill also mentions that other administrative tribunals could also be revised without any approval given by the parliament.

This move has been widely criticised since it could see the government wield unprecedented influence with regards to the appointment and removal of members in administrative bodies, while eventually restricting the independent nature of these bodies.

It remains to be seen what the true intent of this move could be, but the most obvious one is that it could be a direct attack on corruption and undue influence within Indian administration.

5) Political Party Funding

At the time of writing, the law states that companies or organisations are permitted to contribute up to 7.5% of their total net profits over the previous three years in the form of donations to any political party of their choice.

While that has been the norm so far, once the Finance Bill 2017 comes into play, there will be no limit on how much a company or organisation can donate to any political party.

If you thought that was a bit awry, it also states that companies will not be required to furnish details regarding which political part they are contributing to, making the entire process completely anonymous.

It’s hard to put a positive spin on a move like this, but maybe the government’s reasons for this particular move will become more apparent once the bill finally comes into effect.

Additional Reading: How To Invest In Times Of Economic Uncertainty And Geopolitical Risks

6) No Escaping Aadhaar

You’re probably up to your eyeballs by now in Aadhaar related news and information, considering the government’s relentless push towards making it absolutely mandatory for just about anything.

The Finance Bill 2017 just reinforces this push by making Aadhaar compulsory to acquire a PAN Card or for an individual to file his or her income tax returns. In fact, without Aadhaar, filing taxes will be nigh on impossible from now on.

While this certainly could be a positive move to get every Indian citizen to comply with taxation laws, thereby reducing instances of tax evasion, some experts say that it could have a detrimental effect wherein individuals who do not yet have an Aadhaar number could be charged with non-compliance of taxation laws or evasion of tax.

Additional Reading: How To Apply For Aadhaar Card

Depending on how you look at it, the new Finance Bill could either be a boon or a millstone around the country’s neck. However, only time will tell how this will pan out. In the meantime, you can get back to ordering your copy of 1984.

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