Govt. eyes Rs 70000 crores from Amensty scheme

by Harish Gupta, National Editor, Lokmat Group

special report with Table 

Govt. eyes Rs 70000 crores from Amensty scheme

DeMo declarants get last chance to come clean

Harish Gupta

New Delhi, Feb 3

The government hopes to mop up as much as Rs 50000- 70000 crores in Income Tax under an Amensty scheme announced by Finance Minister Nirmala Sitharaman in her Budget on Saturday last.

Interestingly, this bail out package will not only apply to 5 lakh tax dispute cases involving an amount of Rs 11 lakh crores, but also to those who got Income-Tax notices under Demonetisation scheme. These 4.78 lakh disputed cases include 87000 notices issued under DeMo scheme of November 2016. The IT department found these 87000 cases as suspicious entries amounting to Rs 1.50 lakh crores.

It is learnt that the Prime Minister, Narendra Modi was personally keen to bring this one last Amensty scheme for these suspicious assesses to pay taxes minus penalty and interest. The Central Board of Direct Taxes (CBDT) is hopeful that it will collect Rs 70000 crores extra under this Amensty scheme.

The scheme will cover all tax litigation, including those against individuals. Thousands of jewelers across the country including more than 500 in Mumbai, are likely to avail benefit under this scheme open until June 30, 2020.

The scheme “Vivad Se Vishwas” is aimed at bringing down tax disputes pending at the level of the Commissioner of Income-Tax, Tribunals and Courts. The government hopes that the number of disputes will come down drastically as the government is only seeking the principal amount which is pending for even for some decades without interest & penalty. The dispute at the Commissioner level alone is Rs 5.71 lakh crores. It is this amount that the government is targeting and reap the harvest by March 31, 2020. Those who want to settle dispute by June 2020 will have to pay 5% extra.

This initiative is similar amnesty scheme that the PM cleared for indirect tax floated in the July 2019 Budget. The Sabka Vishwas Scheme fetched the government over Rs 35,000 crore and resolved 1.61 lakh cases. The amount involved in these dispute was Rs 80,000 crore tax dues and the government settled for Rs 35000 crores. That scheme waived up to 70 per cent of the tax dues and 100 per cent of interest and penalty. But the Direct Tax scheme will not give any relief in principal tax demand. PM Modi was enthusiastic about the success of this scheme as he repeatedly mentioned of it at his public rally today.

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FM Throws Please-All Tax Budget Googly

by Harish Gupta, National Editor, Lokmat Group

FM Throws Please-All Tax Budget Googly

Cuts Taxes, Withdraws DDT

But Takes Away 70 Exemptions

Sensex down 1000 points

Harish Gupta

New Delhi, Feb 1

Finance Minister Nirmala Sitharaman Budget echoed what the industry was telling Prime Minister Narendra Modi for months - put more money into the hands of the people by reducing tax. She has done exactly the same by reducing personal tax and in the process took a hit of Rs 40,000 crores. Tax payers can pay less taxes under the new system, save more money and spend as they wish. The slabs have been reduced considerably for those earning up to Rs 15 lakhs a year.

But there was a catch ! The FM introduced a “Dual Personal Income Tax” system whereby the tax-payer will lose benefits of 70 out of 120 exemptions that were available to them. The tax payers can opt for any of the two systems. If you want old system of taxes you take advantage of all 120 exemptions. If you want new system, pay less and lose 70 exemption.

This is a googley and no one is sure who will opt for whom. After introducing the “Dual Tax system” for the Corporate sector where it can opt for old 22% tax slab or new 15% slab, the same comes for personal tax too. Obviously, the government wants people to spend money instead of saving and prop up the economy. The slow-down is largely because people are not spending the money.

Another big boost given to companies was withdrawal of Dividend Distribution Tax (DDT). This is surely music to the ears to the companies and foreign investors too. However, the individual tax payers will have to pay dividend tax irrespective of any slab he may be. This is another googly.

However, the government took a series of steps in the Budget to end tax terrorism including creating an institution of a new taxpayer charter, amending the Companies Act to bring criminal liability in certain areas to end, bring faceless appeals etc.

True to the commitment made by PM Modi, the Budget also gives a boost to Make in India and Assemble in India by enhancing customs duty on variety of items and reducing excise duties.

What has baffled everybody is that the please Industry Budget has taken the Sensex crashing by 1000 points today. But Nirmala Sitharaman was confident when she said today, “Wait until Monday, why rush to a conclusion... the full implications will be understood by then.”

Interestingly, PM Modi did not launch any big ticket scheme. Rather, the government slashed allocation for major schemes in the Budget for next fiscal.

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Election Commissioner Ashok Lavasa saga

by Harish Gupta, National Editor, Lokmat Group

A Lokmat Exclusive report

Election Commissioner Ashok Lavasa saga

Income Tax wants to visit his residence

Son's company got funds from Mauritius

Harish Gupta

New Delhi, Oct 2

The Central Board of Direct Taxes (CBDT) is in a catch 22 situation whether to dispatch Income Tax sleuths at the residence of Election Commissioner Ashok Lavasa.

The dilemma is that the Income officers want to quiz Abir Lavasa, son of Election Commissioner Ashok Lavasa who is not responding to its notices. The Invesitgation wing of the Income Tax department has sent five notices during the past 45 days asking him to appear before it. But he has refused to appear on one ground or the other.

Tired of his delaying tactics, the CBDT wants to send a team of its officers at the residence of Abir Lavasa who is an independent businessman. But the catch is that he lives with his father at his official bungalow. Lavasa is a constitutional authority. The CBDT has sought the indulgence of the government whether it would be within the parameters to quiz Abir Lavasa at the residence of a Constitutional authority.

The IT authorities revealed that Abir Lavasa became a director in Nourish Organic Foods in November 14, 2017. This company received Rs 7.25 crore from Mauritius-based Saama Capital in March 2019 when senior Lavasa was Election Commissioner. The Corporate Affairs Ministry's records show that Saama Capital was allotted 50,000 shares at Rs 1,500 per share on March 29, 2019. If this price is taken into account, Abir’s shareholding of 10,000 shares is valued at Rs 1.5 crores.

The Income Tax wants to quiz Lavasa with regard to this ESOP shares given to him and what value he brought to the company as a director and how the funds came from Mauritius. But Abir is neither responding to the notices and nor appearing before the tax authorities.

While separate probe into the financial dealings of Ashok Lavasa's wife and sister are going on, the IT authorities wants to expedite questioning his son's company and funds obtained through Mauritius route.

If sources are to be believed, the CBDT has sent a confidential report to the government if Income Tax officers can inspect the premises of Ashok Lavasa.

It has also sent a copy of the report to the Chief Election Commissioner Sunil Arora and Chief Vigilance Commissioner Sharad Kumar.

The government is not in a hurry and hoping that Ashok Lavasa will himself pave the way by quitting from office. Alternatively, the government will take legal course available under the provisions. It is most likely that after the current round of Assembly polls, decision on Lavasa will be finalized.

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Fly on the Wall : Rahul's Anti-Modi front taking Shape

by Harish Gupta, National Editor, Lokmat Group

Rahul's Anti-Modi front taking Shape

Slowly but surely, the anti-Modi front conceived by Congress president Rahul Gandhi is taking shape. It is also clearly emerging that the NCP leader Sharad Pawar is emerging as a key player in the game. Gone are the days when Prime Minister Narendra Modi and Sharad Pawar used to share pleasant moments in private and used to express bon-homie even publicly. Times have changed particularly after Congress president Rahul Gandhi signaled that he was not in the race for the Prime Minister's post in 2019. Though critics poked fun at his leadership qualities when Rahul Gandhi had declared a few months ago that the Congress is not targeting to win the 2019 Lok Sabha polls on its own. Later, the young scion of the Gandhi family told Sharad Pawar during one of his meetings that he was not a claimant for the post of the Prime Minister though the Congress would be the single largest party in the Opposition. Pawar was surprised at his candid statement but heard him patiently. Rahul Gandhi went to the extent of saying that his party was not a claimant for the post of the Prime Minister in 2019 and would support any one who can carry the coalition successfully. The credibility of the coalition partners is of prime importance as past experiments had failed in 1967, 1977, 1989, 1996 and even in 1998. Therefore, terms and conditions of the alliance should be in black & white and nothing be kept in the abeyance. Rahul Gandhi also signaled that the Congress Party would join the government to give it a stability, if the coalition wins the 2019 polls. Rahul's views are in departure from the past when the Congress supported governments (Charan Singh, Chandra Shekhar, H D Deve Gowda & I K Gujral) from outside. Rahul felt one of the reasons of these governments failing was grave trust deficit and Congress remaining outside the coalitions.

Sharad Pawar to stitch alliances

Rahul Gandhi is understood to have told Sharad Pawar during these meetings that being the senior most leader among the Opposition parties, he alone can bring regional and like-minded parties together under one umbrella. Realizing that he cannot bring the regional and other parties together, Rahul Gandhi wanted Pawar to play the leadership role. Though there was no finality as to who will lead the coalition, it is an unwritten understanding that Pawar would be the leader provided other regional parties like Mamata Banerjee (TMC), Mayawati (BSP), Akhilesh Yadav (SP), Lalu Prasad Yadav (RJD), M K Stalin (DMK), CPM, TDP & others also accept him. These regional parties may not have alliance with the Congress in the Lok Sabha polls in their respective states. But they will try to avoid direct confrontation with the Congress wherever feasible. The Congress-NCP have already finalised alliance in Maharashtra for the Lok Sabha and even Assembly polls. Similarly, it has also been agreed that SP-BSP will contest Lok Sabha seats together and both will spare handful of seats for the Congress and the RLD. But BSP has made it clear that it will not enter into alliance with Congress in other states. Pawar is negotiating with these parties to resolve differences as these will impact the credibility of the alliance. Therefore, all these talks are going on in complete secrecy with no one having a clue of the details. However, Fly learns that seat-sharing talks are proceeding well.

Modi Plans Big Radio Outreach

With just one year to go for the 2019 Lok Sabha polls, PM Modi has decided to kick-start a massive information sharing platform for the under-informed in India's underbelly through a countrywide network of community radio stations (CRS). Taking a queue from Modi's “Man Ki Baat” radio show, the Information & Broadcasting ministry is running amok to promote setting up of the community radios and galvanize the government radio outreach to Modi's programs. The government admits that 65 per cent of India's 1.3 billion people, who live in the villages, have no access to any communication device except radio. Radio is still the most popular mode of information sharing in the remotest Indian villages and we're planning to take community radio to a next level - tech-enabled, but purely local in content and a very interactive platform.

There are currently 206 community radio stations in the country, but mostly confined to a single objective driven primarily by NGOs, educational institutions and social activists. About 239 CRS applications are in process and nearly 506 permissions for setting of new CRS have been granted. The government is targeting 4000 radio stations which can be funded through CSR initiative.

NBCC to handle seized properties

Instead of setting up a separate authority to handle the task of maintaining, managing and earning revenue from immovable properties attached in money laundering cases, the Modi government may entrust the task to the National Building Construction Corporation (NBCC). The officials in the Income Tax, ED, CBI and other agencies had been struggling to find ways to better manage properties seized, frozen or confiscated under the Prevention of Money Laundering Act (PMLA), including those belonging to fugitive businessmen Vijay Mallya and Nirav Modi. Finally, Finance Secretary Hasmukh Adhia who held detailed parleys with other officials decided that NBCC will handle the affairs. Within days, Chairman-cum-Managing Director Anoop Kumar Mittal who was under the scanner, was granted the rights for maintenance, renting and auctioning of such properties. As of now, the ED manages the properties confiscated by it but does not have experience. The government may now consider amending necessary laws to ensure better upkeep of confiscated properties, they said.

Parasaran refused to toe Rahul line

K Parasaran, former Attorney-General of India who was nominated to the Rajya sabha by the UPA government, was one of the experts whom the Vice President, M Venkaiah Naidu consulted on the Motion to Impeach Chief Justice of India Dipak Mishra. It transpires that Parasaran held the view that the motion does not have any leg to stand on and wrong in law and without any basis. Though it was Congress president Rahul Gandhi who commandeered the party and others to go ahead with the motion and even made Abhishek Manu Singhvi to sign it, insiders were surprised that the UPA nominee did not heed to the advise. Rather, he gave a different opinion to Naidu. Rahul Gandhi is seething with anger with the party oldies who appointed Pasarasan to Rajya Sabha.