Clarity and certainty in tax laws will avoid litigations: Expert

Simplified tax procedures, clear tax mechanism, dispute resolving mechanism in the cases involving international investors and a soft stand on penalties, is the need of the hour, says an expert.

Sai Nikesh | The Dollar Business Tax Laws The Associated Chamber of Commerce and Industry (ASSOCHAM), India, on Wednesday, organized a National seminar on Tax Deduction at Source (TDS). The seminar discussed various issues and challenges in the Indian taxation system, while making a strong pitch for timely remittances of taxes as key factors for TDS and the government revenues. Speaking to The Dollar Business, Anshu Khanna, Partner, Tax & Regulatory Services, Walker Chandiok & Co LLP, said, “There is a clarity and certainty that has to be attained in the tax laws so as to avoid litigations.” She further urged for simplification of procedures, clear tax mechanism, dispute resolvation mechanism in the cases involving international investors and a soft stand on penalties, as the need of the hour. The seminars of this kind will help in making consolidated analysis and provides a way to raise such matters for discussions in the official forums and in taking them ahead to the concerned authorities/ policy makers. On the Government of India’s moves towards tax issues involving the Foreign Institutional Investors (FII), Anshu Khanna said, “The government is trying to send positive signals to the FIIs and is making steps to resolve the issues at the earliest.” In her inaugural address at the event, Anshu Khanna spoke on various issues relating to changes that took place over the years in the tax system. She said that the core objective of the tax collections has been achieved over the years. A win-win situation has been achieved in the case of salaried employees, rectification of the statements has become easier and principle question of concern in TDS is addressed, among others. However, a hand-in-hand approach between the payer and payee is changing in the case of non-residents, she added. She informed that landmark changes in Provision of Section 195 of the Income Tax Act, 1961 for TDS has taken place and with an increase in international transactions, the provision emerged as a better handler of such transactions. Further noting that there is a lot of ambiguity over the non-resident payments, she urged for the disclosure of the same, while also referring to a need for ‘guidance mechanism’ to deal with such cases. Shiv Kumar Rungta, president, The Federation of Telangana & Andhra Pradesh Chambers of Commerce and Industry (FTAPCCI), in his address, said that a voluntary compliance by the assessee only can make an efficient tax system. The FTAPCCI president also stressed for an efficient and simpler National Securities Depository Limited system, while raising concerns over the non-mentioning of PAN in the transactions involving non-residents. In the event, a stress was also made on early setting up of nodal officers for tax collections/enquiries as notified by the Central Board of Direct Taxes (CBDT) in 2012 for ensuring better tax collections.    

This article was published on April 29, 2015 – 5:57 pm IST.