Budget 2018: Mr. Jaitley, please make income tax filing simpler
Will Finance Minister Arun Jaitley perhaps bring about the necessary changes to simplify the process during this Budget?
If the first time you opened the Income Tax website to file your taxes did not leave you flabbergasted at its complexity, you are probably one in a million. Literally. According to official data, of the 1.3 billion people in India, only 1.7 per cent people filed taxes in AY2015-16. Now, one of the reasons - and while there are many, this appears to be a key one - of tax evasion is the amount of paperwork. According to reports, experts believe that one of the reasons why many middle-income groups evade paying taxes is the amount of tedious and cumbersome paperwork. Will Finance Minister Arun Jaitley perhaps bring about the necessary changes to simplify the process during this Budget?
"The income tax department has received a lot of request on this and there has been quite a few rounds of discussions as to why one needs every individual to submit their details in a technologically advanced era when information about a taxpayer is available at the click of a mouse," a senior official said, as mentioned in a report by News18. The official also mentioned that the final decision would, however, be taken by the finance minister.
The tax filing process is an intricate one, at best, that begins from picking the correct form as per one's income. Individuals who earn less than Rs 2.5 lakh are exempted from paying taxes, but it is suggested that they should also file the returns. However, it is mandatory for individuals with more than Rs 5 lakh income to file taxes.
The Institute of Chartered Accountants of India (ICAI) also said that instead of ITR 1, ITR 2, ITR 2A, Form 3, Form 4 and Form 4A, there could perhaps be one form, which would also help in simplifying the process.
On top of that, there are speculations about the FM revising the income tax slabs. A recent survey conducted across 200 cities by LocalCircles found out that 31 per cent of respondents want the tax exemption limit to be increased to Rs 3 lakh. Thirty seven per cent respondents want tax slabs to be raised to lower the tax burden on people.
As of now, no tax is levied on income of upto Rs 2.5 lakh annually, while 5 per cent is applied on the bracket of Rs 2.5 lakh to Rs 5 lakh, 20 per cent on Rs 5 lakh to Rs 10 lakh and 30 per cent on income from Rs 10 lakh onwards. These slabs could be revised to increase the non-taxable income bracket upto Rs 3 lakh, while 5 per cent could be applied on Rs 3 lakh to Rs 7 lakh, 20 per cent on Rs 7 lakh to Rs 12 lakh and 30 per cent on Rs 12 lakh and above.
Will the Finance Minister fulfil the wishes of the citizens in the last regular budget of the NDA will be best answered on February 1.