BackArun Jaitley to taxmen: Squeeze parallel economy in a fair manner
Minister says tax department should be able to meet direct tax collection target of Rs7.97 trillion this fiscal
Premium
New Delhi: The government is considering more steps to curb black money, finance minister Arun Jaitley said on Monday, while asking the tax department to take all possible steps to expand the tax base without harassing the taxpayer.
“There are steps which have been announced and some may be announced in future with regard to squeezing the quantum of black money," Jaitley said at the annual conference of income tax commissioners. “If the base increases, collection increases and those who have to pay taxes are compelled to pay it. The ability of the government to give concession in terms of rates to honest taxpayers also increases."
The government has already managed to get the black money bill cleared in Parliament to curb unaccounted wealth stashed overseas and has introduced the Benami Transactions (Prohibition) bill, 2015, to check black money in India.
“You are in an unenviable position. The government and the people expect you to increase the tax base and come down heavily on the evaders. But when you act, you are rarely given a pat on the back," Jaitley said. “The tax base has to increase and there is sufficient scope for that. The parallel economy has to be squeezed. Yet it has to be done in a fair manner and not in an harsh manner."
Nobody should be harassed but the evader must not succeed, Jaitley said.
Jaitley added that given the tax buoyancy so far, the tax department should be able to meet its direct tax collection targets this fiscal.
The government has set a target of ₹ 7.97 trillion for the tax department in the current fiscal.
The government will use excess revenue collections to fund infrastructure, particularly rural infrastructure, Jaitley said, asking the income tax department to better its collection targets, but in a fair manner.
“This year consciously we set a very reasonable fiscal deficit target. Seeing the tax buoyancy, we can easily beat that. But the intention is not to do that. So even if we manage larger tax collections, we would like it to be invested in infrastructure, rural irrigation," said Jaitley.
The government has set a fiscal deficit target of 3.9% in the current fiscal compared with a deficit of 4% in 2014-15.
The minister said that with 55-60% of Indians living off agriculture, the tax department can only go after the remaining 40% to widen the tax base. Agricultural income is exempted from tax in India.
Speaking at the event, revenue secretary Shaktikanta Das asked the tax department to address taxpayer grievances at the earliest.
“There is a scope to expand the tax net in personal income tax but customer satisfaction is the key. Taxpayer grievances have to be solved at the earliest," he said.
“The common grievances include no credit to taxpayers for TDS (tax deducted at source), non-issue of refunds, incorrect adjustment of arrears against dues and the long time taken for rectification of defects."
Anita Kapur, chairperson of the central board of direct taxes (CBDT), said for effective deterrence and tax compliance, the tax department will have to take intrusive action.
“We want to do an effective deterrence. We will do good orders but we will follow those with intrusive actions—search and seizures operations and survey. We are not going to abandon those because we think they do have a deterrent effect. These would be followed by effective penalties and prosecution," she said.
N.R. Bhanumurthy, a professor at the National Institute of Public Finance and Policy, said the parallel economy is difficult to estimate and identify.
“Two-thirds of the economic activity in India is happening in the unorganized sector, something that a developing economy like ours cannot afford. We need large government resources to spend on infrastructure," he said. “Some rules and government policies lead to larger unaccounted activities. More digitization will be the key to track high-value transactions," he added.
PTI contributed to this story.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
