Subhash Bose

18-Aug-2022: SUBHASH CHANDRA BOSE DEATH ANNIVERSARY:

August 18 is the death anniversary of Subhash Chandra Bose, one of India’s most enigmatic freedom fighters, a revolutionary and a nationalist who continues to inspire millions of Indians. He believed military strength was required for India to win its independence. He was also a follower of Swami Vivekananda.

Bose proclaimed the establishment of a provisional independent Indian government on October 21, 1943, and fought the British alongside Japanese troops. Let’s remember one of India’s bravest freedom fighter with some his memorable quotes:

• “Give me blood and I will give you freedom!” One of his most quoted lines is from a speech that Bose delivered to the soldiers of Indian National Army that he commanded along with Mohan Singh.

• “Freedom is not given – it is taken”

• “India is calling. Blood is calling to blood. Get up, we have no time to lose. Take up your arms! we shall carve our way through the enemy’s ranks, or if God wills, we shall die a martyr’s death. And in our last sleep we shall kiss the road that will bring our Army to Delhi.

• “It is only on the basis of undiluted nationalism and of perfect justice and impartiality that the Indian Army of Liberation can be built up.”

• “No real change in history has ever been achieved by discussions.”

• “One individual may die for an idea, but that idea will, after his death, incarnate itself in a thousand lives.”

• “Soldiers who always remain faithful to their nation, who are always prepared to sacrifice their lives, are invincible.”

• “The secret of political bargaining is to look more strong than what you really are.”

• “We should have but one desire today – the desire to die so that India may live – the desire to face a martyr’s death, so that the path to freedom may be paved with the martyr’s blood.”

• “When we stand, the Azad Hind Fauj has to be like a wall of granite; when we march, the Azad Hind Fauj has to be like a steamroller.”

Income Tax Reforms

08-Aug-2022: Income Tax Reforms

Income Tax being the major source of direct & personal taxes, is a very complicated system and has many hassles to while complying to it. This is one of the many reasons why people get discouraged and shun it. What is more astonishing is that in the name of “Simplification & Rationalisation” the IT Dept only complicates the system further. A classic example is the ITR-2 form which runs into 41 pages.

Here, I take the opportunity to suggest some basic ideas which may cut down the complicity of this system. These may look too simplistic, but have great comprehensive nature. Let’s see:

1. Our Financial Year is from 01-Apr to 31-Mar next year. Let’s simply make it the calendar year- 01-Jan to 31-Dec. This will remove great confusion about 2020-21, 21-22, and things like that. This suggestion was given by me in an article way back in 2012. And the GoI wanted to implement this feature in 2017-18, but later it was postponed indefinitely, don’t know why.
2. The concept of Financial Year (FY) and the Assessment Year (AY): these are coined because, what you earn in an FY has to be declared and paid tax in the next year named AY. But I say why the confusion? In any case when you enjoy any service in one period, you compensate it in the next period. Ex. House rent. The only exception is the Insurance premiums which need to be paid in advance. Well, what I suggest is to keep only “Financial” or “Accounting” Year nomenclature and while declaring & filing, just refer to the FY. Simple. It would reduce confusion.
3. The Rounding Off of the final figure to nearest Tens is now redundant because, the computer system has taken over for payment, refund etc. Earlier, small changes currencies were a problem physically. It will reduce system time.
4. The conception of Nominal (ex- in rents, etc.) and Accrual (ex- in receipts). These are imaginary figures, which may change from time to time. Also, taxing something which one has not “earned” but likely to earn because it has become due to him, is not a sound idea. It creates a lot of calculation which may change later when it is finally received at the hands of the Tax Payers. Then there is the chance of duplicate calculation when actually paid. These concepts need to be removed.
5. Double Taxation: For example, the MF AMCs pay dividend Tax to the exchequer, and again the Dividend is taxable at the hands of unit holders. For simplicity one of them must be removed- preferably the retail unit holders’.
6. TDS is another area of improvement. Though the GoI has enhanced the threshold limits, they are still less. For NBFCs & MF Dividend it is still a meagre amount- Rs. 5000 & Rs.4000, respectively. The following are the suggestions for the limits:
• Bank Interest for Senior Citizens: Rs. 1 Lakh, in a year
• Bank Interest for General Citizens: Rs. 80 K, in a year
• NBFC Interest: Rs. 50 K, in a year
• MF Dividend: Rs. 40 K, in a year
7. TDS, again: The IT Dept deducts TDS and finally, after the ITR filing determines the Tax liability, it refunds the excess TDS. Now it is seen that the TDS refund is more than 50% of the TDS collection. It means that the valuable resources are utilized during collection & refund, apart from the time delay outweigh the gain in tax receipt. It should be so adjusted that the refund be not more than 20% of the collection.
8. About the PAN Card: The Govt. says that PAN is invalid if not linked to Aadhaar. Well, then why not discard the PAN altogether and work with only Aadhaar. This will reduce a lot of paper work, risks, etc.
9. And finally, let me suggest the IT rate for taxable slabs:
• Up to Rs. 5.0 L – Nil (General), Rs. 7.5 L (Senior Citizens), 10.0 L (Super Senior Citizens),
• From Rs. 5.0 / 7.5 /10.0 L to Rs. 10.0 L – 10% plus the Lower Slab Amount,
• From Rs. 10.0 L to Rs. 20.0 L – 20% plus the Lower Slab Amounts,
• From Rs. 20.0 L to Rs. 50.0 L – 30% plus the Lower Slab Amounts,
• From Rs. 50.0 L to Rs. 1.0 Cr – 40% plus the Lower Slab Amounts,
• Above Rs. 1.0 Cr – 50% plus the Lower Slab Amounts,
• There shouldn’t be any surcharge over & above this.
10. Example: If one has an income of Rs. 1.2 Cr per annum, then the tax liability will be: 50K + 2L + 9L + 20L + 10L = Rs. 41.5 L (about 34.6% of the Taxable Income).

With these suggestions, I hope the Tax compliance will greatly improve. What do you say?

Judiciary Reforms

04-Aug-2022: Judiciary Reforms in India

Recently, the CJI and other Justices have expressed their views about two very pertinent aspects of our Judiciary System:

• That the poor have no reach to the expensive and elusive houses of Law, and they suffer in silence.

• That sizable section of under trials are resigned to their fate, having no physical, legal, social, financial support.

If you closely look deep inside it, you will be surprised these observations are obvious, and one doesn't require the stature of CJI or Justices. Any average person can guess it. In fact, I have mentioned this very facts in one of my articles 15 years ago.

Well, the pertinent question here is what the CJI or the Justices or for that matter the Judiciary have done about it. Perhaps "Nothing". Everybody knows that the SCI is more interested in advising GoI and other State Govt.s rather that doing its own moral duties.

We must remember that there are over 4.5 crore cases pending in various courts in India (about 75,000 in the SC). And the number of judges stand at about 29,000 (about 33 in SC). If a judge clears one case per working day, it will take 6 years to clear the back log only, leave aside the new cases in these 6 years.

We frequently hear the statement: "Bail is the norm and Jail is exception". But for whom? For people with money & influence, not for poor and innocent people.

Here and now, I suggest some very simple steps to go about or just to initiate Judiciary Reforms. Why simple? It is said that the best solutions are always simple. 

• All the vacancies in all the courts should be filled up on an urgent basis.

• All the courts must work for 8 hours a day and 6 days in a week.

• There shouldn't be any "Summer  / Winter Vacation" for the Judges (That was a Btitish Legacy). We must have 300 working days at the least.

• All the under trials who have already put up time more than if they would be convicted, must be released with immediate effect.

• Then there are some weird cases like one case is still lingering for the accounting mismatch of Rs, 28 only. Such cases must be wound up at once.

• There are still cases where things were delayed deliberately, hearing adjourned on flimsy ground, because the Lawyers get to benefit out of these. Such cases should be stopped out rightly.

• There are several instances of poor bailees who are not released from Jail because of some red-tapism or procedural issues. 

• Unnecessary / uncalled for review petitions must be prevented.

• Special treatment to the influential section must be stopped- like opening the court at the middle of the night, going straight to SC, etc.

• In courts, where there are heavy back-log of cases, extra courts and judges may be created, like Fast Track Courts, Lok Adalats, and Gram Nyayalayas, Family Courts, etc.

• Legal assistance to be accorded to the weaker sections of society.

• In PIL cases, the petitioner has to get at least 1000 signatures of public, prove his integrity & back ground free of any criminal case, and also has to prove his stake / involvement.

• The courts should do away with archaic and British related laws which have lost their relevance today.

• Still there are cases where the Judge is taken to task because of speedy judgement. These things should be encouraged, of course with correct procedure, not taken to task.

These suggestions look simplistic and don't require any special ability to spell out, but difficult to implement in our own scheme of things. But there must be a start sometime- the sooner the better. Now the question is who will initiate it? It's the CJI of the SC of course.

Think it over!

Fuel Price

30-July-2022: Fuel Price Calculation in India

In our country, the price of petroleum products is a very critical and sensitive issue. And it is made still worse by propaganda, mis-information, rumour, dis-information, etc. Here, I have tried to explain the method of calculation for the Fuel Price, in a very simple way.

Before that, a few important points to remember:

• Our country, having a population of 1.4 Billion (140 Crore) people has huge consumption.

• But we have the internal resources for only 15 - 20%, the rest 80 - 85% has to be imported.

• We have to purchase the Crude oil from the international market, by paying in USD.

• So the Forex Rate and Forex Reserve come into play significantly.

• Being the cash-cow of the Government, the taxes remain very high- excise for Central Govt., and VAT for State Govt. None of the parties are willing to sacrifice this in private, even though some protest it publicly.

• The Public Sector Oil Manufacturing Companies (OMCs) must be profitable else they will be a burden to the exchequer.

• Then there are other things like shipment, transportation, dealers’ commission, etc.

Now let’s try to calculate the Petrol / Diesel in India. These can be done in 5 simple steps:

SN.	Description	Petrol	Diesel
1.	Input cost per Litre = [Crude Price in USD / Barrel] X [USD / INR Rate] / [ Litres / Barrel]. Note: One Barrel contains 159 Litres. Crude Price includes shipping Freight etc.
	So if Crude Price is 97 $, Forex Rate is 79 Rs/$, then Input Cost = (Rs./Ltr)	97 X 79 / 159 = 48.20	97 X 79 / 159 = 48.20
2.	Cost of Processing: For Petrol 15 % and Diesel 18 % Approx. (Includes Transport)	48.20 + 15%	48.20 + 18%
	So the Base Prices are (Rs./Ltr)	= 55.40	= 56.90
3.	Central Excise Taxes are approx Rs. per Ltr respectively	= 19.90	= 15.80
	Gross Prices at the entry of Petol Pump. (Rs./Ltr)	= 75.30	= 72.70
4.	The Dealers’ Commission added. (Rs./Ltr) Approx	=   3.50	=   2.50
5.	State VAT – Varies from 15% to 35% (Rs./Ltr) Approx	= 22.60	= 13.80
	Final Price for Customers (Rs./Ltr) Approx	= 101.40	= 89.00

This example is closest to the Bangalore price as of today. Since the Crude Price and the USD exchange rate varies on the day to day basis, so the GoI refreshes the Prices every day at 6 AM.

There are some States, which impose other surcharges additional to VAT.

Disclaimer: Please note that this calculation is for understanding the mechanism, and is not purported to be the actual one.

[ Source: Various Websites ]