Claiming tax wrongly on receivable amount of income
Thursday, 13 November 2008
Akhter Zamil
RECENTLY, it has been observed that Tax officials are claiming tax on the "Receivable'' amount of income on the pretext that these amounts are unexplained and liable to be taxed. Receivable emerges when income from a transaction are not fully received although income has been shown in the accounts fully and tax on such income is paid by the assessee. The question of unexplained investments etc., for adding to income should not arise while the related income is accepted by the tax officials.
Application of Section 82BB: Recently, the tax authority with a view to simplifying the tax assessment procedure for the benefit of assessees has introduced a section 82BB namely, universal self-assessment which is subject to some conditions. These conditions are not helpful for the assessees. One condition is that no assessment order will be delivered under the above section, the acknowledgement receipt itself of the return will be treated as final order. It is undoubtedly a remarkable effort from the Govt. side.
But, this facility does not help an assessee in case of his seeking VISA from Foreign Embassy where an assessee is very often required to submit tax related documents including Assessment order. A certified copy does not help the assessee. So, if a clearance certificate would have been issued stating the income of the assessee along with disclosure of amount of assets/ liabilities it might have helped the assessee from harassment. The tax authority may kindly look into the matter to help the assessee.
Removal of the anomalies in the Tax Law and also curbing of the power of disallowances of expenses by the Tax officials are necessary for making the assessment free and fair and for avoiding undesirable court proceedings at different strata over a period of so many years together. The latter phenomenon also jeopardizes the revenue collection of the government in time. If the income tax cases are assessed by the Tax officials with care, alertness and consciously from the practical point of view with specific references to the relevant sections of the Tax & VAT Law, such unwarranted situations can be avoided.
The present Chairman of the NBR seems to have understood the problems and has taken a positive and laudable attitude to remove all the impediments to speedy collection of revenue, we sincerely thank him for this. Being at the top of layer of the Board, his movement from one end of the country to the other is a glaring example of his hardwork and sincerity. This is no doubt a praiseworthy attempt to enough assessees, actual and potential, to pay tax willingly. But his efforts will go in vain unless the subordinates under him reciprocate his views with a similar frame of mind and for the greater cause of the nation. Misunderstanding about the role of Tax Consultants and Tax professionals in the minds of Tax officials should also be removed and they should be taken into confidence by the Tax officials. These persons like Chartered Accountants, Cost Accountants, Lawyers etc., are no doubt dignified professionals in the society and very much honest in their profession. Being dignified persons, they can not indulge in any unlawful action leading to Tax evasion. Although in some cases confusion arises, this is only due to miscommunications of information between the assessees and the tax consultants. The assessee should be convinced that the tax rate (for an income of Taka one, he is required to pay at a varying rate of 10 to 25 paisa only) is nothing but an insignificant portion of his income very much needed by the Govt. for the welfare of the whole nation where he is also an important part of. If proper guidance is given and fears of the assessees are removed, quite definitely the expected results can come sooner than later.
In fine, this writer would like to note here, one again, that unnecessary disallowances will create unjust taxation and prolong the revenue collection for the Govt., resulting in impediment, to the nation's development process. The sooner the causes for poor collection of tax are redressed, the better for the interest of the nation's development.
The writer is a senior partner, Howladar, Younus & Co.
RECENTLY, it has been observed that Tax officials are claiming tax on the "Receivable'' amount of income on the pretext that these amounts are unexplained and liable to be taxed. Receivable emerges when income from a transaction are not fully received although income has been shown in the accounts fully and tax on such income is paid by the assessee. The question of unexplained investments etc., for adding to income should not arise while the related income is accepted by the tax officials.
Application of Section 82BB: Recently, the tax authority with a view to simplifying the tax assessment procedure for the benefit of assessees has introduced a section 82BB namely, universal self-assessment which is subject to some conditions. These conditions are not helpful for the assessees. One condition is that no assessment order will be delivered under the above section, the acknowledgement receipt itself of the return will be treated as final order. It is undoubtedly a remarkable effort from the Govt. side.
But, this facility does not help an assessee in case of his seeking VISA from Foreign Embassy where an assessee is very often required to submit tax related documents including Assessment order. A certified copy does not help the assessee. So, if a clearance certificate would have been issued stating the income of the assessee along with disclosure of amount of assets/ liabilities it might have helped the assessee from harassment. The tax authority may kindly look into the matter to help the assessee.
Removal of the anomalies in the Tax Law and also curbing of the power of disallowances of expenses by the Tax officials are necessary for making the assessment free and fair and for avoiding undesirable court proceedings at different strata over a period of so many years together. The latter phenomenon also jeopardizes the revenue collection of the government in time. If the income tax cases are assessed by the Tax officials with care, alertness and consciously from the practical point of view with specific references to the relevant sections of the Tax & VAT Law, such unwarranted situations can be avoided.
The present Chairman of the NBR seems to have understood the problems and has taken a positive and laudable attitude to remove all the impediments to speedy collection of revenue, we sincerely thank him for this. Being at the top of layer of the Board, his movement from one end of the country to the other is a glaring example of his hardwork and sincerity. This is no doubt a praiseworthy attempt to enough assessees, actual and potential, to pay tax willingly. But his efforts will go in vain unless the subordinates under him reciprocate his views with a similar frame of mind and for the greater cause of the nation. Misunderstanding about the role of Tax Consultants and Tax professionals in the minds of Tax officials should also be removed and they should be taken into confidence by the Tax officials. These persons like Chartered Accountants, Cost Accountants, Lawyers etc., are no doubt dignified professionals in the society and very much honest in their profession. Being dignified persons, they can not indulge in any unlawful action leading to Tax evasion. Although in some cases confusion arises, this is only due to miscommunications of information between the assessees and the tax consultants. The assessee should be convinced that the tax rate (for an income of Taka one, he is required to pay at a varying rate of 10 to 25 paisa only) is nothing but an insignificant portion of his income very much needed by the Govt. for the welfare of the whole nation where he is also an important part of. If proper guidance is given and fears of the assessees are removed, quite definitely the expected results can come sooner than later.
In fine, this writer would like to note here, one again, that unnecessary disallowances will create unjust taxation and prolong the revenue collection for the Govt., resulting in impediment, to the nation's development process. The sooner the causes for poor collection of tax are redressed, the better for the interest of the nation's development.
The writer is a senior partner, Howladar, Younus & Co.