Government is committed to lowering taxes: FM Nirmala Sitharaman
The Russia-Ukraine conflict has impacted all countries by driving up oil prices and affecting global supply lines. Sitharaman explained, “We are clear. We are taxing crypto until we decide whether to regulate or ban it. There is no doubt that a large number of transactions are taking place.The administration has said that we would tax the money,” The Finance Minister explained the Budget proposal to tax any revenue from the transfer of virtual digital assets (VDA), at 30%, in response to a discussion on the Finance Bill.
She attempted to deflect charges from the opposition that the government has merely worsened the plight of ordinary people. She emphasized that the Modi administration is committed to decreasing taxes. Minister noted that while this budget does not tax the people, it does allocate funds to areas where the multiplier is highest, such as infrastructural asset construction.
She stated that the number of taxpayers has risen to 9.1 crores from 5 crores just a few years ago. The Finance Bill was adopted by the Lok Sabha on Friday, completing the financial exercise for the fiscal year FY23. The Bill was approved by voice vote in the lower house after Sitharaman’s 39 official modifications were accepted.
On the TDS problem, Sitharaman stated that the move is only for tracking transactions and is not a new tax. “The person paying the TDS can always reconcile it with the rest of his taxable income.” That is why our tax base is broadening in general, and TDS is a reasonable approach to track transactions and expand the base.”
In the face of criticism from the party on issues ranging from the burden on the average man to the recent gasoline price hike, Sitharaman highlighted that the government had made the conscious decision not to use more taxes to fund the recovery amid the pandemic.
Now we will understand why taxes are essential.
“Only section 132 of the CGST Act permits for it for certain circumstances like evading taxes, purposeful tampering of records, and false information with the intent to avoid,” the minister said in response to allegations that people are being imprisoned for GST filing errors. “Imprisonment is reserved for serious instances solely, not for little blunders or faults.”
Why lowering taxes is important
“Why should I pay income tax?” is a question that may have occurred to you at least once while reviewing your pay stub or preparing tax returns. Because taxes can take up a significant amount of your income, many people assume that taxes are nothing but a nuisance.
The budget of governing a country is enormous. The government can carry out civic operations because of the taxes we pay.
One of the most important sources of revenue for the Indian government is income tax. If people begin to view income tax as a burden and refuse to pay it, it will have a direct influence on our nation’s progress as well as societal breakdown.
Governments must also devise a tax compliance mechanism that does not dissuade people from taking part. According to recent firm survey data for 147 economies, tax rates are among the top five constraints to their operations, and tax administration is among the top 11.
Economic growth frequently increases the demand for increased tax income to fund rising government spending. At the same time, an economy must be capable of meeting those needs. However, how revenue is spent is more significant than the level of taxation. High tax rates and a lack of tax administration are not the main causes for low tax collection rates in developing economies.
How many types of taxes exist
Taxes are defined as a mandatory contribution to the Government of India by individuals or corporations who fall within the income level. Taxes, including the rules that govern them, are one of the most complicated aspects of any financial system. This complication comes as a result of many forms of taxes with varying tax rates, retrospective, and prospective at times. We shall attempt to determine the many sorts of taxes levied in the Indian financial system, as well as their impacts, in this post. Taxes are imposed at all levels in India, from municipal to national, and are one of the government’s primary sources of revenue.
Every tax imposed within the country must be accompanied by an accompaniment law passed by the State Legislature or the Parliament.
There are two types of taxes: direct taxes and indirect taxes. Both taxes are implemented differently. Some of them are paid directly, such as income tax, corporate tax, wealth tax, and so on, while others are paid indirectly, such as sales tax, service tax, and value-added tax.
Apart from these two traditional taxes, the country’s Central Government has altered other taxes to achieve a goal.
According to the Central Excise Rule enacted by the Indian government, anyone who manufactures or produces any ‘excisable goods or products,’ must pay the duty due on these commodities. No excisable products that are subject to duty will be allowed to transfer without paying duty from any point where they are manufactured or produced under this program.
Edited by Prakriti Arora