DEDICATED TO VIJAY KELKAR
Vijay Kelkar is hailed as the man who reformed the tax administration in this country. He is credited with authoring the Exempt Exempt Tax regime, which seeks to do away with all notifications conferring exemptions from tax to a host of taxpayers in order to maximise tax revenue. the discussion paper is still doing round in the CBDT website and probably no one will ever dare to withdraw the many concessions that our IT Act had given. Well this includes certain well meaning concessions to promote savings such as 80CC which provide for exemption to Premia for Life Insurance Policies, Contribution to Provident Funds etc . Certain outdated exemptions with regard to forex earnings are utilised by individuals and business alike to claim tax shelter which is legitimately not theirs.
Actor Amitab Bachchan had been mired in controversies for a while now. Amitab or shall we call him the Big B of Indian cinema which is now his accepted psuedonymn has been asked by the Supreme Court to explain his claim of 30% exemption from income earned from anchoring Kaun Banega Crorepati program which earned huge TRP for the channel. He had claimed this exemption under section 80RR which provides for such exemption on income earned from abroad more precisely on Forex earnings. This applies to Film directors, Sports Persons, Authors and Musicians. I am not sure if actors are included in this category. But the law is clear that the income should have been earned in Forex. The Department says that the income should have been derived from performing abroad. Whereas the anchoring of the program was very much in india. Initialy the Actor had claimed the deduction, later on withdrew it and once again sought to claim this. This was allowed by the Mumbai High court much against the departments contention that the actor does not deserve to be treated like this. After considerable lapse of time, the Department had preferred an appeal which also gives some suspicion to the motive and timing of the appeal. The actor has a celebrity lawyer Harish Salve to argue his case and may also win his appeal. but the point is whether it is legitimate to exempt income in foreign currency which was provided in the days of our poor forex reserves. Today we have huge reserves of FOREX and there is no necessity to incentivise such incomes. Probably Vijay Kelkar forgot to delete this exemption from the tax laws.
|