Published 14:31 IST, February 2nd 2020
Direct tax collection target scaled down in budget; new slabs to benefit taxpayers: CBDT chairman
The direct tax collection target has been downward revised to Rs 11.80 lakh crore in the Union Budget after making a "realistic assessment" of various economic factors, a top government official said
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direct tax collection target has been downward revised to Rs 11.80 lakh crore in Union Budget after making a "realistic assessment" of various ecomic factors, a top government official said. set target for revenue collection (personal income tax, corporate tax and ors) was Rs 13.35 lakh crore for 2019-20 financial year that ends on March 31.
"Those (earlier) estimates have been revised in budget and our new target would be about Rs 11.80 lakh crore which I am pretty confident that we will achieve it," CBDT Chairman P C Mody told PTI in a post-budget interview. Asked about reasons for recalibration of target, Mody said, "It was just a realistic assessment of what is achievable and also it has to be taken into account that we have had a lot of revenue forgone."
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revenue foregone is essentially on two accounts - huge refunds issued and cut in corporate tax. "It is a realistic assessment of whole system." Central Board of Direct Taxes (CBDT) is policy-making body for Income Tax Department that collects revenue for government under direct taxes category. Mody said I-T Department has mopped up about Rs 7.40 lakh tax in government kitty so far. "We are very very hopeful (of achieving revised target) because past experience shows that last quarter (January-March) is period when maximum revenue comes in." "I am pretty confident of achieving new target," he said. New I-T slabs
Talking about new personal income tax regime and slabs proposed by Finance Minister Nirmala Sitharaman in her budget speech on Saturday, CBDT chairman said aim of government is to "give benefit of lower taxes to both corporates and individuals". This starts from basic government policy to phase out deductions and exemptions, he said.
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"First this was attempted when we tried to lower corporate rate tax (last year). This time (personal income tax), it has been provided that you can avail new tax structure rate only if you forego deductions or exemptions." Mody said it was thought that when money is in hands of taxpayers, y will be better judge as to what tax saving instrument would y like to put ir money in rar than "induced saving" which may t fetch m required rate of return.
So, we are t trying to put any kind of direction in investment behaviour of taxpayer, we just want our tax structure to be straight and easy to comply with, he said. "That is basic philosophy behind this move of new tax slabs. Also, this is completely optional," Mody said. He added that while about 70 I-T deductions have been scrapped, "most relevant" have been retained. NRI Tax
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Talking about budget proposal of taxing n-resident Indians t paying taxes in any foreign country, CBDT chairman said move is "essentially an anti-abuse provision". "Some study showed that people are trying to stay in multiple countries or a period lesser than that would make m a resident," he said. Asked if se people were doing so to avoid paying taxes, CBDT chief said it "appears" that tax evasion could be reason.
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"w, in such cases of Indian citizens who are resorting to this system we are putting a provision that if y are t resident of any tax jurisdiction n y will be treated to be a deemed resident of this country." "And by virtue of that, ir taxable income or to say ir entire global income, will be taxed here," Mody said. He said India w has multilateral tax treaties with or countries where "we continuously exchange information and hence getting information on such people will t be that difficult".
At present, if an Indian or a person of Indian origin mand his stay in India such that he remained a n-resident in perpetuity, he was t liable to pay tax on his global income in India. Tightening residency provisions, Union Budget 2020 has also proposed to reduce period of stay in India to 120 days from 182 days earlier for persons of Indian origin (PIOs) to be categorised as n-resident Indians (NRIs).
14:20 IST, February 2nd 2020