Talking to The Financial Express, former chairman of the Central Board of Direct Taxes (CBDT), RS Rathore, made a case for reintroduction of gift tax and replacement of TDS (tax deducted at source) with final withhold. "A final withhold on TDS will save tax payers from running to the income-tax department for refund," said Rathore.

He also expressed hope that the Government would bring in a provision for the release of wrongfully seized accountable property by the income-tax officials before final assessment and rationalisation of tax slabs.

"Low rates of import duty and high rates of excise are causing a lot of trouble to the industry. A major surgery on the excise and customs is needed to boost industry," said Rathore.

Abolition of gift tax has proved to be an erroneous decision and itsreintroduction will be "a corrective measure", felt Rathore. However, KM Agarwal, former president of the Institute of Chartered Accountants of India disagreed and said: "It is already tax capital and any misuse should be tackled at the time of assessment," he said.

On the lacunae in search and seizure procedures, he suggested that "the final assessment of seized property takes about four years and IT officials should be given the power to return wrongfully seized property before final assessment."

On the income tax front, Rathore demanded a rational structure. "There should be three slabs for income tax. Ten per cent for up to Rs 1 lakh, 20 per cent for Rs 1-2 lakh and a uniform upper slab." Agarwal pointed out that the Government is not in a position to lower tax rates. Rathore, however, was apprehensive about the Government introducing a fourth slab for over Rs 5 lakh for which there will be a surcharge. "It will be a retrograde step." Agarwal, too, suggested that imposition of any additional chargewill not be a rational step at this juncture.

The so-called buoyancy in the direct tax collection is a farce, said Rathore. "The existing situation is partly due to Kar Vivad Samadhan scheme and partly due to VDIS. The direct tax collection should grow by 12-13 per cent every year." Commenting on the Samman scheme, Rathore said: "How can you felicitate the highest tax payer who is often the highest tax evader too?" The Blue Return Scheme of the industrialised nations, which gives some benefits to the good tax payers for a period of time, should be introduced.

Rathore further demanded tax concessions for stock and mutual funds. "Any capital gain from shares, if reinvested into further equity, should not be taxed," said Agarwal.

Service tax was another area of concern for the experts. Virender Ganda, president of the Institute of Company Secretaries of India, said that the existing service tax mechanism is discriminatory. "What is required for widening the tax net is better administration and not suckingthe taxes by any possible method. There should be slabs in the service tax also," he said.

Making permanent account number (PAN) compulsory without creating the required infrastructure is an erroneus decision, said Rathore. Moreover, he questioned the need for filling up a separate form for the PAN number.

To boost the collection of lagging indirect taxes Rathore suggested an increase in import duty on some items to provide level playing field to the domestic players. "Zero import duty is a non-possibility," he said. Modvat collection is suffering due to too many intermediaries and too much work. "The situation can be improved only by reducing the cumbersome procedures."