This had to be done because the court decision was contrary to the intention of the legislator, she added.
The budget sought to amend the Income Tax Act retrospectively from 2005-06 to clarify that the education tax and surtax would not be permitted as deductions in the form of expenses.
“Some courts give a verdict contrary to the intention of the legislator. We had to propose an explanatory amendment… There are times when you have to be retrospective just so that we are fair. It is not to go there with another intention Sitharaman said during a post-budget interaction hosted by industry body Ficci.
She noted that not doing so retrospectively would have become an enforcement issue and would have been unfair to two groups of taxpayers.
The explanatory memorandum, provided with the finance bill, explained in detail the reasons for this decision. He referred to a Supreme Court decision which pointed out that the provisions of the Finance Act 2004 and the Finance Act 2011 specified that school tax was an additional surcharge levied on income tax. . Officials said that since the tax was effective from the 2004-2005 assessment year, it needed to be clarified retrospectively to remove any uncertainty.
Speaking at the session, Revenue Secretary Tarun Bajaj said the industry should ‘accept it with grace’ and asked captains of industry not to press charges in view of the court rulings . “Tomorrow we could have a situation where income tax itself becomes an expense,” Bajaj said, adding that these things have a major impact on revenue collection. He also rejected an industry request to allow gifts and gifts to doctors as business expenses.
The budget had proposed that gifts and gifts would not be treated as business expenses under Section 37 of the Income Tax Act.
On the decline, private investment
The finance minister said India is ready to face any situation arising from global developments, including the US Federal Reserve’s decision to reverse monetary easing, and will not let the economy suffer .
“Now, with the RBI and the government working together and watching very carefully what is happening in the global financial ecosystem…we have also learned lessons from the latest crisis that the Indian government faced in 2012-13. and 2013- 14,” she said.
The government is monitoring what is happening with regard to global strategic developments, decisions by the US Federal Reserve, as well as global inflationary pressures, she added.
“…We are watching very closely, and I can assure the (industry) leaders here that we will not let India’s economy suffer for lack of preparation,” Sitharaman said.
She also asked India Inc to take advantage of the recovering economy and step up investment.
“Now is the time for us as the Indian team to rise up. We are at a time when the recovery of the economy is very clear…this recovery is therefore going to place India as the economy at fastest growing among major economies and this would continue even into the next fiscal year,” the Minister said.
By missing the divestment target, the finance minister said the government is accountable to parliament and will take a cautious course rather than pushing for a quick conclusion.
The finance minister pointed out that some past cases have been revived by people seeking justice even after 10 to 15 years of fixing a problem.
“So there is a sense of caution which I want you to appreciate also among the bureaucrats that nothing should later be found wanting. They take their extra precaution…and I would rather go that route than push them to a quick conclusion,” Sitharaman said.
She added that the government has already completed the privatization of Air India and Neelachal Ispat Nigam Ltd and the initial public offering of Life Insurance Corporation of India is likely to take place soon. “So things are moving and the goal for this year is more realistic,” she said.
Energy Sector Reforms
Responding to suggestions made during the post-budget interaction with industry body Assocham, the finance minister noted that the government was working at multiple levels to address issues in the energy sector and that there was a need to strengthen coordination between the States and the Centre.
“Difficulties facing the sector due to legacy issues, we will first try to resolve and eliminate them so that futuristic financing and opportunities for better partnership can be worked out,” he said. she declared.
Regarding the challenges facing the aviation sector, Sitharaman noted that the global price of aviation fuel was a concern and more so for airlines.
The Minister of Finance has said that she will address the issue of levying the Goods and Services Tax on jet fuel at the next meeting of the GST Board.
“It’s not with… (the Centre) alone, it has to go to the TPS Board. The next time we meet in the Board, I’ll put it on the table for them to discuss,” he said. she declared.