The Income Tax Bill 2025 was a great opportunity to bring real changes to the tax system of the country. The top taxpayers in the country are actors and not the corporate richest and politicians, many of whom are minting money. Donations to political parties and electoral trusts are exempted from tax, paving the way for massive corruption, which was highlighted in the electoral bonds case in the Supreme Court.
The much-acclaimed income up to ₹12 lakh being tax-free helps only 64 lakh income tax assessees, whereas 142 crore people pay GST, which is fleecing every citizen.
Taxing the rich has been a demand that has been ignored totally. The Finance Bill could have brought back wealth tax. The corporate tax, which was reduced, could have been increased. The Income Tax Bill must have introduced a progressive tax system to bring in a higher tax on the top 1% in the country. Inheritance tax could have been introduced. Perquisite tax could have been abolished, as it covers only public sector employees, while all others practically do not pay any perquisite tax.
All over the world, taxing the rich has been on the agenda, but despite the highest income inequality in our country, the government is not bothered to tax the rich.
There are three sections in the Income Tax Bill that weaponize the Income Tax Department. Section 247 of the bill is an additional weapon. Though the IT department already has powers to seize computers and electronic items, Sections 247(1) and 25(1) provide powers to seize electronic media, computer systems, data storage, virtual digital space, email, social media accounts, online investments, banking accounts, websites, remote and cloud servers. The provision that they can break open locks means they can hack systems if the password is not shared.
This must be only for the purpose of creating fear in the minds of people who raise their voices against the wrongdoings of the government. This section has to be removed from the bill.
Section 253 provides another weapon: the survey of charities. Already, many of them have lost their Foreign Currency Regulation Act (FCRA) number on flimsy grounds. Now, they can be further terrorized through surveys, where authorities can question freedom of expression and poverty alleviation efforts by minorities in the name of conversion. Even just a survey itself, by entry into their premises, can spoil the image of the organization and lead to financial losses.
Section 237 provides powers to the commissioners to appoint officers under lateral entry, which will be an additional weapon. We all know who will be appointed in the department and what they will do.
Section 519 gives powers to provide immunity, which will also be used as a weapon, as we have already seen with politicians being left free upon joining the ruling party or coalition.
Altogether, the government, in power for ten years, has not learned any lessons from the increasing inequality and continues to support the richest and not the poorest.
Thomas Franco is the former General Secretary of the All India Bank Officers’ Confederation and a Steering Committee Member at the Global Labour University.
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