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Board culls steps to widen tax base

The Central Board of Direct Taxes is taking steps to double the size of the country's tax base in three years. But in spite of a determined thrust in this direction in 1997-98, it was able to widen it by only about 25 per cent, according to A Balasubramaniam, member (legislation) of CBDT.

He was referring to the many critical fiscal issues raised earlier by Indian Merchants' Chamber president Ram Gandhi and by Rajesh Kapadia, chairman of IMC's taxation committee, at a largely attended meeting organised by the Chamber in Bombay yesterday.

Only 1.2 per cent of India's population pays income tax. It is necessary that more people should proudly participate in bolstering the country's kitty, as direct taxes have a strong element of social equity built into them.

Revenues from various taxes and duties in India are about 10.2 per cent of the gross domestic products, while they are far above 20 per cent in other progressive counters, he observed.

He agreed with the chamber's view that tax litigation's have been steeply rising, and the last of pending litigation's is growing endlessly. At present, a taxpayer hopes to see his tax disputes settled after a gap of 25 to 30 years. A panel appointed by the CBDT has suggested measures to curtail the generation of new litigation's and to expending decisions on the cases pending, he pointed out.

Balasubramaniam agreed with the chamber's view that there is a strong case of extending substantial fiscal relief on housing loans. Similarly, there is also considerable writ in demand for lowering tax rate in respect of long-term capital against by small tax payers. You have made out your points well. And they will be considered seriously in the highest quarters, he assumed.

He sought to impress the corporates on the need to practice fiscal discipline and pay up taxes within the due date. No relaxation on dates for payment of statutory dues like provident fund and gratuity is desirable, he stressed.

Earlier, representing the chamber's demands, Kapadia pleaded that tax litigants be given an honourable opportunity to settle their disputes with the department expeditiously by way of a special scheme designed on the lines of the hugely successful Voluntary Disclosure of Income Scheme, as there was no justification in continuing litigations endlessly.

He pleaded that the department should accept the stark realities prevailing in India in respect of generation of black money. As such, the Income Tax Department should boldly come forward to accept the amount returned under the head income from unknown sources without asking questions about the source of such income.

Certainly, people with income from unknown sources' will be ready to pay tax at the rate of 30 to 35 per cent thereby putting an end to the generation of black money.

He urged the CBDT that the department should issue only reasoned and healing assessment orders , so that filing of appeals will become easy for the assessee. He also submitted that dividend income of corporates is being taxed over and overs as this practice is patently unjust, it should be ended by amending Section 115(O) of the Income Tax Act.

Kapadia also urged that the threshold limit of income for the purpose of taxation be raised to Rs 60,000 as was promised in the ruling Bharatiya Janata Party's election manifesto.

UNI