MoF reviews tax hike for truckers

new delhi: in what may turn out to be yashwant sinha’s first tax proposal roll back, the finance ministry is reconsidering the hike in presumptive taxable income for truck owners, it is learnt. the budget has proposed to increase the presumptive income per vehicle under this scheme from rs 1,800-2,000 per month to rs 3,150-3,500. truck owners have protested this and the ministry is now re-examining the justification of the proposed increase. however, a final decision on whether to backtrack or not is yet to be taken. acoording to the existing income tax law, a presumptive scheme of taxation is available to persons in the business of plying, hiring, or leasing goods carriers. this scheme is optional and applies only to those who own not more than ten goods carriages. an assessee opting for the scheme is spared maintenance of books of accounts and other details to substantiate income. under this scheme, a fixed amount of income per vehicle is presumed to accrue to the owner of the vehicle and charged to tax at applicable tax rates for the year. currently, the income under this scheme is presumed to be rs 2,000 per month per vehicle for owners of heavy goods vehicles, and rs 1,800 per month, per vehicle for the owners of light goods vehicles. in order to adjust these rates for inflation, the budget proposes to increase the presumptive income per month per vehicle to rs 3,500 for the owners of heavy goods vehicles and to rs 3,150 for owners of light goods vehicles. this would obviously push up the tax liability of all truck owners opting for this scheme and has therefore met with strong protests. it may be mentioned that the introduction of a service tax in 1997 on truckers and transporters of goods had also met with vociferous protests. finally, the finance ministry had to keep the levy in abeyance.