Sitharaman gives note ban hoarders a chance to come clean

NEW DELHI: Individuals who received income tax notices following demonetisation in 2016 will be able to take advantage of the amnesty scheme announced in the budget, revenue secretary Ajay Bhushan Pandey said. These will be with regard to unexplained bank deposits and not cash unearthed in raids.“Search cases will be excluded… We will come out with the framework… Some demonetisation cases have been finalised and some people have gone to appeal — they can take advantage,” Pandey told ET in an interview.Finance minister Nirmala Sitharaman had announced a ‘Vivaad se Vishwas’ scheme in the budget with a view to cut down on litigation.No Penalty if Full Liability PaidUnder the scheme, taxpayers will be spared penalties and interest if they pay the entire liability.The government announced on November 8, 2016, that Rs 1,000 and Rs 500 notes then in circulation were being rendered void.This was followed by income tax authorities sending notices to individuals who couldn’t explain deposits of such cash made in bank accounts after the announcement.Pandey said the new personal income tax regime that offers some individuals the option of foregoing all exemptions at a lower rate was aimed at simplification and giving a fair deal to those who don’t claim deductions, such as retirees. “The complications were there in the old regime, but in the new regime, it is quite simple. So, this is a step towards simplicity,” he said.He said people were sometimes forced to make investments to avail of tax benefits. “The earlier regime… it was slightly unequal to those who are having less funds for exemptions. Our claim is not that we’re providing tax benefit to everyone. Our policy objective was to offer a simplified tax structure, and if possible, give some relief to those who are unable to claim,” he said. This was an established system in many parts of the world where people either take an itemised deduction or a flat deduction, he said.“What we have done is that if you have a flat deduction, you have a flat rate structure, and if it suits somebody to take more deduction, you can take that,” he said.The new system will benefit those without the cash to invest in multiple instruments to claim deductions, he said. “If I am in a situation where I have surplus funds or I need all the exemptions, I will take that exemption and stay in the old one,” he said.“So, in this entire proposal, not a single person will be the loser. It is a win-win for everyone.”Pandey said the scheme provides adequate protections for those switching to the new regime when asked about the treatment of investments such as those in the National Pension System (NPS) and Public Provident Fund (PPF) made over the past few years.The government will conduct a detailed exercise to identify exemptions as it seeks to do away with them and simplify the regime.“This is just the beginning,” he said. “We’ll have to see how many people find it suitable for this tax regime. Based on that, the exercise will be conducted and we’ll see if more exemptions are to be removed. It will be considered at an appropriate time based on the experience of this one.”On the increase in customs duties on various items, Pandey said the levies had been increased marginally because these goods are being manufactured by micro, small and medium enterprises (MSMEs) in India, are of good quality and are even being exported. “It is just and fair that we provide a level playing field to our domestic MSMEs,” he said.

from Economic Times https://ift.tt/37TEdlt