Union Spending Plan 2017- Ache Din for Digital Economy.
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Pains Din for Digital Economy
A chain of bombs one after the another are continuously being stopped by government on individuals having black money. After making big decisions of demonetisation and benami property, everyone was anticipating some surprises in the financing costs 2017 and federal government did as expected. This year’s finance costs was in some way concerned with suppressing black money and promoting digital payments (I.e. payments through cheques, demand drafts, electronic cleaning system).
Concern that emerges is that what all have been proposed by the government to promote digital payments and limit cash transactions.
In order to promote money less economy and openness various steps/decisions have actually been proposed like
DONATION U/S 80 G AND 13 A
Under the existing provision of area 80 G, reduction is not allowed in regard of donation made of any amount surpassing 10000 if it has actually been paid in money. In order to promote cash less economy, it is proposed that no reduction will be allowed in respect of contribution of amount going beyond 2000 in money …
Additional to openness in electoral financing existing provisions of section 13 A are likewise proposed to be changed which states that earnings of political celebrations registered with election commission of India subject to the condition that they have sent a report to election commission providing the information of contributors supplying contribution in excess of20000 nevertheless there is no restriction on receipt of donation in money. It is proposed that no contribution shall be received of a quantity exceeding 2000 in money. It must be received through account payee cheque or account payee demand draft or through electronic clearing system.
AMENDMENT IN SECTION 44 ADVERTISEMENT
As always people expect that some benefit needs to be offered to little organization.
NEW ENTRY AREA 269 ST
In this spending plan it is proposed to insert area 269 ST in the act which states that no person shall get a quantity of 2 lakhs or more
- In aggregate from a person in a day
- In respect of single deal
- In regard of deal relating to one event or event from a person
Otherwise than by an account payee cheque or account payee demand draft or electronic clearing system
It is additional proposed that said limitation shall not use to government, banking companies (now withdrawn through alert 28/2017)
Deals of nature referred in area 269 SS are omitted from the scope
Matter of concern is what will occur if a person do not comply with arrangements of area 269 ST, a brand-new area 271 DA has actually been proposed which spells out a penalty of 100% shall be charged I.e. quantity equal to invoice.
DISALLOWNACE OF DEPRECIATION U/S 32 AND CAPITAL EXPENDITURE U/S 35 ADVERTISEMENT ON MONEY PAYMENT AND AMENDMENT IN SECTION 40 A( 3 )
Under existing arrangements, revenue expenditure incurred in money exceeding specific monetary threshold limitation is not permitted (sec40 A( 3 )) subject to exception under rule 6DD. There is no provision for disallowance of capital expenditure paid in money.
In order to discourage money transaction even for capital investment, it is proposed to amend section 43( real cost of possession) which says if payment made to person in aggregate in a day goes beyond10000 in cash then such expense shall be neglected while computing real cost.
Very same provision has actually been proposed for capital investment u/s 35 AD.
CONCLUSION
So, it won’t be incorrect to state that this years budget has actually taken a step to curb black cash and promote digital transactions majorly by disallowing cash expense subject to restrict and offering reward for accepting digital payments.
About Author: Rohit Goel
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