ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Taxation in the Times of Covid-19

The pandemic spreading across the world has resulted in a rising demand for immediate tax relief measures worldwide. The taxpayers in India too expected that some concessions would be granted to them while paying taxes. While analysing the measures to provide tax relief by the Government of India, it may be helpful to view them in juxtaposition with the steps taken by other countries. There are some issues that are peculiar to India, and this calls for the need to adopt a holistic approach and devise a strategic plan in respect of direct tax laws.

Vision of the Kelkar Papers

The approach of the Kelkar Task Forces on direct and indirect taxes suffers from certain basic deficiencies for which the consultation papers put out by them have come under flak from large sections of the taxpaying public. The deficiencies are twofold: (1) lack of a strategy to secure majority support, and (2) absence of a sound conceptual framework. In a way the two are interrelated; failure to visualise a strategy stems partly from the weaknesses of the conceptual foundations of the proposed reforms. This essay seeks to explore the sources and nature of these deficiencies. Since the proposals relating to direct taxes have attracted most attention, the discussion here is confined mainly to the direct taxes paper, especially the structural reform proposals, though some observations are made on the proposals for reform of indirect taxes and the administrative system as well.

Political Parties and Income Tax

The BJP's attempts to persuade the income tax department to let it set off its losses on publishing activities against its income from other sources raises some curious issues.

Taxation of Charitable Trusts

Given the large need for services in social development and social welfare areas, which the state is unable to meet in sufficient measure, and the need to encourage and support non-profit organisations promoting cultural activities as well those 'civil society' organisations defending civil liberties, promoting the welfare of women and children, etc, the state should spare from tax income that does not accrue to any individuals or juridical persons for private benefit. The acceptance of the recommendations of the Advisory Group on Tax Policy and Tax Administration for the Tenth Plan on tax treatment of charitable organisations would do grave damage to the work of the voluntary agencies which form one of the heart-warming and bright aspects of our society.
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