The Telegraph
Since 1st March, 1999
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Plea to take cell phones out of 1/6 tax list

Calcutta, June 28: The Indian Cellular Association (ICA) has recommended the exclusion of the clause in the 1/6 scheme under Section 139 of the Income Tax Act that makes it mandatory for cellular subscribers to file income tax returns.

ICA, the apex body of the cellular handset industry, comprises of manufacturers, distributors, retailers and consumers.

An in-house research by ICA also shows that the scheme is a major hurdle is stamping out the gray market and does not serve the basic purpose of increasing the tax base.

“The amendment has proved to be counter-productive as a number of benami connections are owned by companies, which are used by family members who are not income tax payees,” says ICA president Pankaj Mohindroo. “All expenses of such mobile phones are being debited to the profit & loss accounts of companies, reducing their tax liability,” he added.

In a communication to the chairman of the Central Board of Direct Taxes, P. . Singh, ICA points out that due to benami connections, a parallel economy based on cash transactions is growing. This has resulted in revenue loss for the I-T, customs and sales tax departments of all state governments.

“The law implies that a cellular connection is a luxury that few can afford. This premise no longer holds true as mobiles have helped carpenters, technicians and even taxi drivers to increase their income and raise their standard of living,” explains Mohindroo.

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