Only CAs, Lawyers Gaining From Present Income Tax Laws: P Chidambaram

Mumbai: Congress leader P Chidambaram on Monday urged the Centre to replace the existing Income Tax Act with the Direct Taxes Code and raised doubts over 11.2% nominal GDP growth projections, saying the war in Ukraine has blocked supply chains and some sectors have seen a major price hike.

Taking part in the debate on the Appropriation Bill and the Finance Bill in the Rajya Sabha, Chidambaram quipped that “no one benefits from this Income Tax Act except chartered accountants and lawyers”.

He referred to section 10(23)(c) of the Income Tax Act which is over eight pages and said that “clause (a) is being amended by the Bill where sub-section 23(c) alone is in nine pages.”

“A day will come when a charitable organization or a religious organization will say, ‘Let us get out of these clutches of the Income Tax Act and pay the tax’. Most charities and trusts today are crippled by these provisions and the repeated amendments year after year,” the senior Congress leader said.

Expressing concern over the economic impact of the Russian invasion of Ukraine, he said: “Supply chains have been suppressed. Shipping rates have risen astronomically. The chip is missing. There’s a shortage of containers. There is a shortage of credit. World trade will be affected. In fact, the IMF has estimated that the GDP of every country will be down by 0.5% to 2%.”

“Given all these developments in the last eight weeks, are you (the finance minister) still convinced that your nominal GDP will actually grow by 11.2% (in 2022-23)… I don’t want ill. I wish for a growth of 11.2%. But I have serious objections as to whether it will actually grow at 11.2% in the changed circumstances in the year beginning 1 April.”

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