New tax slabs to benefit taxpayers: CBDT chairman

NEW DELHI: 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. The set target for revenue collection (personal income tax, corporate tax and others) was Rs 13.35 lakh crore for the 2019-20 financial year that ends on March 31. "Those (earlier) estimates have been revised in the 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 in a post-budget interview. Asked about the reasons for the recalibration of the 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." The revenue foregone is essentially on two accounts - huge refunds issued and cut in corporate tax. "It is a realistic assessment of the whole system." The Central Board of Direct Taxes (CBDT) is the policy-making body for the Income Tax Department that collects revenue for the government under the direct taxes category. Mody said the I-T Department has mopped up about Rs 7.40 lakh tax in the government kitty so far. "We are very very hopeful (of achieving the revised target) because past experience shows that the last quarter (January-March) is the period when the maximum revenue comes in." "I am pretty confident of achieving the new target," he said. New I-T slabs Talking about the new personal income tax regime and slabs proposed by Finance Minister Nirmala Sitharaman in her budget speech on Saturday, the CBDT chairman said the aim of the 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. "First this was attempted when we tried to lower the corporate rate tax (last year). This time (personal income tax), it has been provided that you can avail the new tax structure rate only if you forego deductions or exemptions." Mody said it was thought that when the money is in the hands of taxpayers, they will be better judge as to what tax saving instrument would they like to put their money in rather than "induced saving" which may not fetch them the required rate of return. So, we are not trying to put any kind of direction in the investment behaviour of taxpayer, we just want our tax structure to be straight and easy to comply with, he said. "That is the 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, the "most relevant" have been retained. NRI Tax Talking about the budget proposal of taxing non-resident Indians not paying taxes in any foreign country, the CBDT chairman said the 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 them a resident," he said. Asked if these people were doing so to avoid paying taxes, the CBDT chief said it "appears" that tax evasion could be the reason. "Now, in such cases of Indian citizens who are resorting to this system we are putting a provision that if they are not resident of any tax jurisdiction then they will be treated to be a deemed resident of this country." "And by virtue of that, their taxable income or to say their entire global income, will be taxed here," Mody said. He said India now has multilateral tax treaties with other countries where "we continuously exchange information and hence getting information on such people will not be that difficult". At present, if an Indian or a person of Indian origin managed his stay in India such that he remained a non-resident in perpetuity, he was not liable to pay tax on his global income in India. Tightening the residency provisions, the Union Budget 2020 has also proposed to reduce the period of stay in India to 120 days from 182 days earlier for persons of Indian origin (PIOs) to be categorised as non-resident Indians (NRIs).

from Economic Times https://ift.tt/36Rkwtc