Tax reforms guided by rate cuts, simplification: Finance secretary

Tax rate reduction and process simplification are the key pillars of the direct tax reforms, which along with technology use is improving the ease of doing business as well as of living for tax payers, finance secretary Ajay Bhushan Pandey said on Friday.

Pandey said at a conference organised by industry chamber Federation of Indian Chambers of Commerce and Industry (FICCI) and the Economic Times that decisions such as corporate tax rate reduction and removal of dividend distribution tax from companies were guided by this philosophy.

“We should do tax administration from the point of ease of doing business. In the case of a common man, it should improve ease of living,” he said.

Pandey’s emphasis on ease of doing business and of living comes a day after Prime Minister Narendra Modi highlighted the advantages India offered to global investors, which included a transparent and predictable tax regime and a tax system that encourages and supports honest tax payers.

Almost 53% of Income Tax department will be involved in faceless assessment proceedings in one way or the other, he said.

Pandey said that the tax department is receiving information from banks and other agencies like stock market players, mutual funds and property registrars. Tax returns are matched with the data from these agencies for selecting cases for scrutiny.

“We are selecting only about 2 lakh returns for scrutiny out of seven crore tax returns received,” said Pandey. He said India is now getting information from about 90 countries in an automated way that goes into data analysis. However, honest tax payers are not harassed, Pandey said.