March 9, 2019:
The proposed DTC is expected to give major relief to the Indian middle class & make income tax progressive by providing more relief in the 5% & 20% tax slabs.
A parliamentary panel wants the government to finalise the long-pending Direct Tax Code “at the earliest” to simplify & rationalise tax laws further.
The Parliamentary Standing Committee on Finance in its preliminary report on unaccounted money said that in order to widen the tax base & increase actual tax revenue, “the long-delayed Direct Tax Code should be finalized at the earliest & re-introduced in Parliament with a view to simplifying & rationalising the direct tax laws in the country,” it said in the report.
Direct taxes are those which an individual directly pays to the government. It includes items such as income tax, corporate tax & capital gains tax.
According to officials, the proposed DTC is expected to give major relief to the Indian middle class & make income tax progressive by providing more relief in the 5% & 20% tax slabs.
The Direct Taxes Code (DTC) Bill was introduced to Parliament for the first time in August 2010 when the UPA was in power. But with the dissolution of the 15th Lok Sabha, the money bill lapsed.
The panel emphasised the importance of reintroducing the DTC bill & said tax reforms & further relief to the taxpayers would help in curbing the black money stashed in India & abroad.
During the discussions on the issue of “status of unaccounted income/ wealth both inside & outside the country,” revenue secretary Ajay Bhushan Pandey strongly defended the government’s decision to demonetize old Rs 1000 & Rs 500 bank notes & maintained that it led to better tax compliance.
Pandey told the panel headed by Congress’ Veerappa Moily that “the effect of demonetisation has to be seen in terms of the number of tax payers who have come into our system, the number of returns filed, number of new persons filing the returns & the growth of tax.”
He further added, “If you see the tax buoyancy which is kind of a comparison with the GDP growth in nominal terms & then with respect to that how much is our tax collection, then we can definitely see that the ratio here is the growth of 14%, 18% & 20%. All these point that demonetisation has helped in controlling the black money in our country.”
He also reiterated that the anti-graft measures of the Centre during the last four & half years in the form of Black Money Law, the Fugitive Criminal Offenders Act, & Demonetisation, have resulted in hitherto undisclosed income of about Rs 1,30,000 crore coming into the tax net.