Dear BCAS Family,
It is that time again when we all tune in to a single track. Yes, it’s the budget time. When you get this message, the Finance Minister (FM) after enduring grueling hours with her team would have presented the last full budget of the government – repeatedly walking a tightrope to balance a budget between the several populist demands and the financial prudence. While the nation is full of expectations, ideas and suggestions, it is the community of tax practitioners that in particular is keeping its fingers crossed as to see what the budget will offer. While the FM echoes the sentiments of Robert Frost that she has ‘promises to keep and miles to go’, the daunted community of tax payers and the tax practitioners will be happy with even the small steps on the reforms and concessions.
I would like to echo a wish list that has surfaced in conversations with many of you on multiple occasions.
First, we need to have the income tax slabs, deductions and relief benchmarked to the inflation index. Inflation is not a produce of the populace but the fallout of the policies of the government. To punish the honest tax payers with tax on an income that has truncated due to rise in the inflation, is like beating a dumb man for his inability to lend his voice. They both are helpless victim of circumstance.
Second, there needs to be some concessions for the senior citizens whose contribution as tax payers in their prime earning years to the nation cannot be overlooked. With the nuclear family system gaining more preference the seniors must have income saving capability to support themselves independently. A few graceful concessions on mediclaim limits, pensions and special interest rates will help them give more security.
Third, the ease of doing business is implemented in its true sense in the income tax assessments for the business. Undoubtedly, common man has substantially benefitted by the simplified procedures. However, the same cannot be said about the tax assessments of the business. Increasing appeals is the proof of this. There are approx. five lakh appeals pending at the CIT levels across the country. Add to that the appeals pending with the IT Tribunals, High Courts and Supreme Court and that gives a scary picture of the mindset of those in the administration. Accepting that many of these could be justifiable from the point of view of Revenue, it is by far admitted even at the senior levels of the tax administration that many are infructuous and have their origin in the fear of being labelled as partisan to the assesse. FM must give impunity to the tax administration for encouraging fair and impartial interpretation of the statute and speedy resolution of the issues.
Fourthly, there needs to be an administrative reform that brings about better coordination between the CPC Bengaluru and the assessing officers. There can be a separate series of articles that could be written about the issues that the assesses face. To name a few, grievances are attended in a mechanical manner and resolution thereof is not in the best interest of the justice, process of online rectification has a lot of restriction in conveying the points of rectification, issue of not allowing credit of TDS of earlier years, whose accounts are maintained on cash basis is a nightmare.
Lastly, the controversial judgement on the Charitable Trust by the Hon. Supreme Court has opened a Pandora’s Box which will completely unsettle the accepted norms of exemption of the income of the Charitable Trust. Before the issue gets out of the hand the FM needs to bring appropriate amendments to the provisions that income can be spent on the primary as well as the related objects of the Trust.
If wishes were horse then beggars would ride is the famous proverb. The irony is of the life is when the rightful wishes render you as beggars. I am sure the corridors of the powers do realize the compulsion of the people to seek better system for them and will eventually comply.
Annual Transparency Report
National Financial Reporting Authority (NFRA) has issued a draft of the Annual Transparency Report to be submitted by audit firms every financial year. The implementation of this filing will start with statutory auditors of the top 1,000 listed companies on March 31.
Audit firms will have to reveal details of their ownership and management structures. The report will cover details about the revenues of the auditor and its network firm for the current and previous years. It will include the statutory audit and a detailed break-up of the non-audit service fees too. It will have to report professional and technical education for the professional staff as also share their working alliances, collaborations, licensing and knowledge sharing arrangements in India or abroad. These and many more details as required will have to be published on the website of the statutory audit.
The report is stated to be on the lines of contemporary international best practices implemented by independent audit regulators in other geographies. NFRA believes the report will be a lighthouse, to ensure high quality audits and preventing conflict of interest by maintaining independence.
The question that arises is while it states ‘what’ is required does it clarify ‘why’ it requires it? Does it in any way improve the quality of audit? Could these aspects have not been covered by the ICAI through its Peer Review mechanism? Is it a direct fallout of requirements that have been considered as best practice in the developed world? Maybe some more introspection and open forum discussion is required before this step is implemented.
Winds of Change
Breaking with the tradition, ICAI has revamped the curriculum after five years, instead of ten, keeping in mind significant changes in GST and the evolving industry requirements. The new course will have a multidisciplinary approach with diverse subjects, that include; AI, Blockchain, Data Science, Traditional Knowledge (proposed by NEP), Psychology and Indian Constitution. And to boost accessibility for students, it is proposed to offer the course in regional languages with computer-based exams. Hopefully this should bear good fruits in future.
The CA Final results were out and is very heartening to see more young ladies in the toppers’ list. I hope this will encourage many more female students from across the country to aspire to become CAs. With 3.65 lakh CAs and 44 overseas chapters, the ICAI has grown phenomenally to become the second largest accounting body in the world. In a concerted effort, to keep the momentum escalating, ICAI is focusing and investing in education, to fulfil its aim of preparing ‘global professionals’.
BCAS has organised a Public Lecture Meeting on the Direct Tax Law provisions of the Finance Bill 2023, on Tuesday, February 07, 2023, at Yogi Sabhagruh. I urge you all to make it convenient to attend in person at 06:15 PM at the venue to get insight into nitty-gritties of the provisions from a distinguished speaker CA P. D Desai. Apart from this there are many interesting events lined up in the days to come on various topics viz. Master Class on M & A, Prosecution for Cheque Bouncing, ChatGPT, Audit Quality Maturity Model, Power Summit, International Tax & Finance Conference and Residential Study Course on GST at Gandhi Nagar, Gujarat. For details, please keep a tab on the announcements.
Before I sign off let me wish you all a very happy Vasant Panchami with a hope that it brings spring back in our life.
With Best Regards,
CA Mihir Sheth
Please feel free to write to me at email@example.com