What are the latest avenues in taxation law that are indeed catching new eyes?
INTRODUCTION
Taxation law governs the practice of collection the fair and regulated taxes from the mass in order to provide social facilities which are provided by the state to the public in a welfare society. Tax laws in India have multiple sources, drawing from federal and state constitutions, statutes, and regulations. India’s taxation system is a dual one, with both the Central Government and state governments having the authority to impose taxes. Local authorities, such as municipalities, can also impose minor taxes. The Constitution of India is the ultimate source of this taxing authority allocation, and it emphasizes that no tax can be imposed or collected without a legal basis, as stated in Article 265. Understanding, implementing, and, if necessary, defending one’s tax obligations or disputes are integral aspects of India’s tax landscape.
Constitutionally established scheme of taxation
Article 246 of the Indian Constitution, distributes legislative powers including taxation, between the Parliament of India and the State Legislature. Schedule VII enumerates these subject matters with the use of three lists:
List – I- entailing the areas on which only the parliament is competent to make laws,
List – II- entailing the areas on which only the state legislature can make laws.
List – III- listing the areas on which both the Parliament and the State Legislature can make laws upon concurrently.
Separate heads of taxation are no head of taxation in the Concurrent List (Union and the States have no concurrent power of taxation). Goods and Services Taxis an indirect tax collected on supply of goods or service.
- Central Tax: Portion of Tax to central government on intrastate sales.
- State Tax: Portion of Tax to state on intrastate sales.
- Integrate Tax: tax for interstate sales.
Latest Avenues in Taxation Law
Taxation law is always a subject of changes and developments as there are new amendments in recent taxation regime such as The Bill amends the Income Tax Act, 1961 (IT Act) and the Finance Act, 2012. The Taxation Laws (Amendment) Act, 2021.
The existing avenues of taxation law is subject to changes so as the creation of new avenues as well. The recent avenues which are created are-
1.Digital Economy Taxation: With the rapid growth of the digital economy, taxation of digital goods, services, and transactions has become a significant concern for governments worldwide. This area includes addressing issues like cross-border e-commerce, digital advertising, and data localization.
2. International Taxation: International tax law continues to evolve, with a focus on issues like base erosion and profit shifting (BEPS), transfer pricing, and the implementation of international tax treaties and agreements.
3. Environmental and Green Taxes: Many countries are introducing or expanding taxation related to environmental concerns, such as carbon taxes and taxes on single-use plastics. As environmental issues gain more attention, this area of tax law is likely to grow.
4.Cryptocurrency Taxation: The taxation of cryptocurrencies is an evolving field. Governments are developing regulations and policies for taxing cryptocurrency transactions, holdings, and mining activities.
5.Tax Technology (TaxTech): Tax departments and firms are increasingly relying on technology for tax compliance, reporting, and analytics. This includes the use of AI, blockchain, and data analytics for tax-related tasks.
6. Tax Dispute Resolution: Handling tax disputes, audits, and litigation is a growing area of specialization, especially as tax authorities become more aggressive in their enforcement efforts.
7.Estate and Inheritance Tax Planning: As wealth transfer and estate planning issues continue to be important for individuals and families, estate and inheritance tax planning remain relevant areas of taxation law.
8.Tax Incentives and Credits: Governments often use tax incentives and credits to promote specific activities, such as renewable energy investments, research and development, and job creation. Navigating these incentives is an essential skill for tax professionals.
Author:- Varshita Kushwaha (4th year B.COM LLB student (Taxation law) in University of Petroleum and Energy Studies)
