India is a democracy with strong, creadible Legal system. Anything which is contrary to law will be thrown out. In the Vodafore case also, Supreme court declared that the demand raised by the tax authorities is not tenable under the law. Now the government, in order to protect it`s revenues went ahead and amended the law with retro effect. The change also been challenged by the affected parties and the matter is not yet decided. However, good sense prevailed on the government which is now thinking of a solution with win-win strategy. If you go through the government argument, you will find some logic in their plea. They say the deal was structured in such a way to avoid payment of capital gains tax in India by floating Special entities outside India. Once the Vodafone was done, there were a large number such deal were done in the same lines. Government felt it is not in the interest of the country, to allow such circumventing transactions, thereby loosing it`s legitimate income.
What is a future government says, sorry we taxed you at a lower rate but our expenses are now increasing out of control. Can you please pay up some more tax? And if you don`t then it would amend the tax laws saying we are levying a retrospective surcharge on all tax paid.
What would you do?
Retrospective tax is unacceptable in a democracy and government for the people. If a government thinks it has erred or there is a legal loop hole then all it should do is to plug it. A government cannot punish some one who is smart to avoid taxes. A government should only punish those who evade taxes, and punishment should be brutal.
The way to avoid this is to tax all at a uniform rate of 15%. NO deductions allowed. So this way the income tax will be be simplified.
Any Indian who earns should pay tax via a pan card number. Even a laborer. and only a tax payer of 21 years of age or more should be allowed to vote.
This way we will elect responsible people.
Even a tank begins to leak over a period of time, however strong it may be, but what if, when we talk of growth, but do not make babus and netas accountable.
We have laws of the british, which provided immunity to officers in discahrge of duties, why do not we abrogate those laws, and make them accountable, for previously, they filled their own pockets, and there were honest officers too, but now, they have hierarchy of sharing collected loot in personal capacity, and further, they even collect heavily for the netas ?
So are loopholes going to vanish ?
[If someone has finalized a deal in consonance with the existing provisions] ....UR Q
What about bankers looting public, by enhancing charges ?
What about insurance companies, which take away ur agency as per IRDA norms, but who gets the benefit of the commission, the insurer, the agent, or the policy holder ?
Retrospective taxation is like beating up the chick for the hen being bald!!
If the government is incompetent in forming proper policies, why should they blame people who followed the poicies in place at that point of time?
And when you want honest taxpayers by whacking them retrospective ammendments, what about retrospective cancellation of Coal allotments....Chidambaram is as quiet as a Manmohan!!
Ours is a country having 140 crore population ( Govt says 121 crores) 20-25 crores indians live in unorganised pvement, i.e. rly stations, under bridges, varandas, rail lines side, remote forests etc and those indians have neither any address nor any vote in they are in National population Register. Pathetic conditions even after 65 years of independence.
Regarding taxes and wealth - People who got oppotunity looted the country and people during this 65 years. Looting in massive level took place after 1991. Rich people became super rich and poor became too poor.
So if we want see our country as good country to live in, every citizens should be identified and every inch of our land should be accounted. Wealth should be assed taking 1990 as base year and adjust inflation and value property/wealth as on date. Tax appropriately taking due account of income and wealth. Our nation will become surplus nation.