The Finance Minister Arun Jaitley, moved the Finance Bill 2017, for passage in the Lok Sabha a couple of days ago. So why is a Finance Bill introduced in the Lok Sabha? The Government makes financial proposals for the next financial year, through the finance bill. The Finance Bill 2017 has some amendments in it. A provision has been introduced to cap legal cash transactions, at just INR 2 Lakhs from April 1st 2017. The original proposal was for a cap of INR 3 Lakhs. The aim of this move….Destroy cash earned the illegal way and also black money in the economy.
Another important amendment has been made for making Aadhaar number compulsory, while filing income tax returns…..This move could stop tax fraud and tax evasion. The Government will introduce electoral bonds in the Finance Bill 2017. This move is expected to bring transparency in political funding and curb black money in political life.
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It is now compulsory to quote Aadhaar while filing income tax returns and also while applying for a PAN. Many citizens have multiple PAN cards. If you have multiple PAN cards, you can easily evade taxes. From July 1st 2017, you would have to compulsorily link Aadhaar to your PAN, otherwise your PAN card is invalid. You have to quote PAN while buying gold jewelry above INR 2 Lakhs, real estate or any luxury items. Your PAN is linked to Aadhaar. The Government can easily track your high value transactions and check if you have paid the necessary taxes.
The Government aims to bring transparency in political funding with electoral bonds, introduced through the Finance Bill 2017. If you want to donate money to your favorite political party, you can do so using electoral bonds. You simply buy the bonds through cheque or any digital payment. These bonds are in bearer form and your identity is not disclosed to the receiver (political party). The political party will convert these bonds to money via bank accounts.
It will be very difficult for a political party to get funding from anonymous sources. The money coming through electoral bonds can be tracked. Political parties can receive only INR 2000 as a cash donation from a single source. For a donation above INR 2000, political parties will have to disclose source of funding. With political parties getting money through electoral bonds (where money can be tracked), political parties can no longer be funded by illegal cash.
Do you know why the income tax department used to conduct raids? The income tax department used to conduct search and seizure operations, if it had reasons to believe that you were in possession of undisclosed assets or you did not comply with the summons which ask you to provide the necessary information to the Tax Department. The Tax Department could seize only those items, which were specified or to be searched for in the raid, or mentioned in the book of accounts. The Tax Department could not conduct a baseless raid.
Now, after the amendments in the Finance Bill 2017, the tax department has the right to seize any of your properties or any other person’s properties who are being raided, without giving any solid reason. The tax department simply says… “Interest of the revenue”. This gives the tax department power to temporarily confiscate your personal or business property.
The Government has said that the income tax department will not harass any citizen who is honestly paying his taxes. So if you are an honest citizen, you have no reason to fear the tax department.
The Finance Bill 2017 can be a landmark bill. It makes sure the honest citizen who pays his taxes is not harassed. If you are honest, why will the tax department raid you? Dishonest politicians are going to have a tough time, getting political funding. But…they would have to realize that the era of illegal cash for political funding is over and get used to the new reality. Be Wise, Get Rich.
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