More Sharp and Hard Teeth given to Income tax officers To Frighten Tax payers.

Modi government's demonitisation drive is nearly failed now in disclosure of black money. Government has not been able to get revenue in form of taxes or non deposition of old currency notes of Rs. 500 and Rs. 1000 denomination.

Now government is trying to get more taxes with the help of harsh provisions (like 115BBE) of Income Tax act. Every one is expecting income tax officials to be much harsh rather cruel. Now if Income tax assessing officer expects that any assessee has not disclosed his income fully or truly then explaination would be called. Transactions for which problem may arise are like:-


Loans taken from Family members or friends

Properties and Gold etc received from parents or grand parents.

Money spent in family matters like marriage or major illness etc.

Source for any property purchased.

Then ITO would ask for proper source of funds and if ITO is not satisfied for geniuneness of Source or transaction like ITO is not satisfied that you have taken loan from friend and doubts that cash has been paid back against the loan bank entry then this loan amount would be added to income and 83%  of such addition in income would be taken as tax and penalty.

Every one in India knows that how the officers get satisfied. Now they have much more sharp and hard teeth to frighten the tax payers.

If government is planning to work this way then what will happen to the agenda of Ease of doing Business.

PM SIR -------- NITI (Policy) WAS GOOD BUT RAN NITI (Strategy) ????

Niti or Ran-Niti, policy and strategy ~ these words were used by our Prime Minister Shree Narendra Modi recently in an interview with a prominent media group. He said it was our policy or Niti to curb black money. It has been there without change and strategy or ran Niti was being changed as per the situation. He tried to justify the government’s approach after announcement of demonetization on 8th November. Everyone knows that demonetization decision was not only taken in haste but was also implemented in an unplanned manner.

Almost every day government issued new directions and notifications. It was being done to show that government is working proactively to curb black money.

           

In the start both prime minister and finance minister said that anyone having old currency notes of Rs 500 and 1000 notes in their bank accounts. Later, it was said that person depositing old currency notes into banks will have to satisfy bank officers by filling a simple form with some questions. This form was introduced when more than 70% of (nearly) Rs. 15 trillion of old currency notes was already deposited. Then very next day of this announcement the condition of satisfying the bank officers and this form was again discontinued.

Both prime minister and finance minister in election rallies, media briefings and their big size hoardings said that no interrogation would be done from the people depositing up to 2lakh 50 thousands in their account. But later, it was said that those depositing Rs. 2.5 lakhs also may be interrogated to the prove source and income and cash holding.

New currency of Rs. 2000 and 500 were not printed and distributed in banks with proper planning. This created long queues in the banks. India being a Cash economy, Business activities witnessed steep downfall.  From luxurious items and big brands to small vendors, hotels, restaurants and small chai valas, daily bread earners like rickshawalas and rahdiwalas all were affected.

      

Government imposed cash withdrawal limits from banks and even that much cash 24000 per week from saving accounts and 50000 per week from current account was not available in one go. So everyone has to visit banks and stand in queue everyday if he wanted to withdraw 24000 or 50000 per week.

Printing of new notes was not planned and cash was not distributed at district level currency chests all over the country.  ATMs were not calibrated for issuing new size Rs. 500 notes and it took more than 20 days before ATMs started issuing Rs. 500 new notes. It seemed that whole government machinery was working in a immature way. NITI or RAN Niti was good but the implementation was equally bad.