Byte on while staying informed about the latest tax updates.
Seventy-five days after the Union budget – during which the world we live in has changed unrecognizably – the Prime Minister announced a INR 20 trillion package. He called this “Aatm Nirbhar Bharat Abhiyan”. “Self-reliant India is the only path,” he said. The idea is to respect the nation’s and individual’s inherent capabilities by which the problem will be overcome.
This Week’s Dose-
- From STIFLING BINARIES to finding THE RIGHT MIX
- Deadlines – “EXTENDED”
- Tax everything that’s Chinese!!
- Irish Artists are LUCKY – Crazy Tax Story!
From STIFLING BINARIES to finding THE RIGHT MIX
The Stimulus Package.
PM Narendra Modi on Tuesday announced massive new financial incentives on top of the previously announced packages for a combined stimulus of INR 20 lakh crore (USD 260 billion). According to our Finance Minister, Nirmala Sitharaman, this is not just a financial package. It is a “reform stimulus, a mindset overhaul and a thrust in governance.”
Pretty inspiring, isn’t it? Hoping this package is not just “a headline and a blank page”
It was obvious that this was not going to be a “cash-out” package. It would be a combination of facilitating infusion of money into the economy through a variety of measures. It is definitely designed to extend a helping hand but not a fiscal stimulus, less so a bailout. The purse strings haven’t been loosened yet.
For those who assumed it to be a INR 20 trillion ‘cash package’, there will not only be devils, but quite a few demons in the detail.
The actual strategy!
The underlying strategy is to address liquidity. The important agenda is to leverage the money in the economy and make the most out of it. For individuals, the 25% reduction in TDS will help increase disposable incomes. GST refunds is an important missing element in this.
So far no level of liquidity control has been adjusted but the lock jammed wheels of commerce have been greased a bit.
It is highly likely from the PM’s speech and the FM’s detailing that the Government has moved away from the stifling and silly binaries of lockdown versus ‘no lockdown’, lives versus ‘livelihood’ and stimulus versus ‘no stimulus’ to find THE RIGHT MIX.
Deadlines – “EXTENDED”
The package came along with a few anticipated deadline extensions. They are:
- Due date for all income tax returns for FY 2019-20 has been extended from July 31 and October 31 to November 30.
- Tax audit date has been extended from September 30 to October 31
- Window for making payments under the ‘Vivaad se Vishwas Scheme’ – a tax dispute resolution mechanism – without any additional amount has been extended till December 31.
- Pending income tax refunds to charitable trusts, sole proprietors, limited liability partnerships and cooperative societies will be issued immediately.
Finally, one less thing to worry about, i.e. IT-return.
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Tax everything that’s Chinese!!
Let’s balance it out
What if a 10% Covid Tax is levied on China. It is a matter of intense thought but this can easily help India overcome the trade deficit and push the domestic industry. Our trade deficit was INR 4.1 lakh crore which is always a business of loss. And China has been using the WTO (World Trade Organisation) provisions to disregard Indian industry.
“There is a need for a special Covid Tax on Chinese products…,” said Sanjay Jaiswal, a BJP leader.
Overdependency on China- won’t work…
The modi Government is aware that overdependency on China might prove to be a disaster in the long run. The current crisis has taught us very well about the repercussions of being dependent. Since products from another country cannot be banned under the ‘free trade agreement’ , it is essential to increase the duties on Chinese products to restrict the imports.
The ‘Make in India’ campaign should be aggressively promoted.
Killing two birds with one stone.
What many institutions and individuals are proposing in the times of dwindling economies is- to impose more tax on the citizens, especially the super rich. But what they might fail to understand is that, this would lead to a reduction in economic activity and stifle the job growth..
Instead of increasing the taxes on individuals, if the duties on Chinese products are increased, the country just might be able to boost the economy while keeping the imports from China to a minimum.
India could take a leaf out of Trump’s book.
Irish artists are lucky – Crazy Tax Stories!
Want to be a starving artist? You might go a little less hungry if you find your muse in Ireland.
An exemption of 50,000 euros. Wait! What?
In order to boost the Arts, income earned by writers, composers, visual artists and sculptors from the sale of their works is not taxed – Ireland exempts up to 50,000 euros in profits from the sale of ‘qualified’ artistic work from income taxes.
Grants, awards, and prizes are also exempted if they are related to the artist’s work.
Wondering how Irish judge art?
A work has cultural merit if: Its contemplation enhances the quality of individual or social life as a result of its intellectual, spiritual or aesthetic form and content.
A work has artistic merit when: Its combined form and content enhances or intensifies the aesthetic apprehension of those who experience or contemplate it.
Ireland can very well prove to be a ‘tax haven’ for artists.
Byte of the Day
“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”– Winston Churchill