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Broader tax base would allow tweaking of tax rates: P C Mody, Chairman, CBDT
Feb 04, 2020
NEW DELHI, 4 February 2020: Mr P C Mody, Chairman, Central Board of Direct Taxes (CBDT), today said that as the tax base gets broader, there is a chance of tweaking the tax rates as there is a large portion of unorganized sector which is outside the tax framework and they should be encouraged to become part of tax framework.
Speaking at an 'Interactive Session on Union Budget 2020-21', organized by FICCI, Mr Mody said, "Once that happens, the accuracy of filing returns would also improve and if that increases the tax base then there would be a case in future to further lower the taxes."
CBDT Chairman added, "Government's primary onus is to move towards a simple, lean and straightforward tax structure and one that is easy to comply with." He said that the government wants to trust the taxpayers and is making an effort to move the tax administration in that direction.
"The government is making all efforts to put in place a system that offers best and seamless services to the taxpayers," said Mr Mody.
He said that there is much greater unanimity in the government now towards building synergies between the taxpayer and tax administration. "With ease of compliance at the core of the entire approach we would want to make pre filled return forms available to the tax payers," added Mr Mody.
Speaking on the 'Vishwas se Vivad' scheme Mr Mody said, "An in-depth review of the issues related to litigation have been undertaken in order to minimize disputes. We have moved towards a faceless assessment system and hope to move towards a system of faceless appeals as well."
Highlighting the new income tax structure announced in the budget, Mr Mody said that the new structure will give an option to the taxpayer to choose and file the best suited tax filing structure. "This is an optional scheme and there is no compulsion to shift to new scheme and this option is available to you on year on year basis. I feel that the younger generation will find it very interesting to go in for the new regime," he said.
Mr Pranav Sayta, Chairman FICCI Taxation Committee and National Leader, International Tax and Transaction Services, EY India, said that the budget was constructed around building trust in the country � which is very positive and to a large extent, met the expectations. He indicated that the change announced in Dividend Distribution Tax was long overdue and the tax burden has now shifted to the individual tax holder. Mr Sayta also appealed CBDT Chairman to consider bringing back the earlier provision where in expenses incurred on earning the dividend were deducted before calculating the tax liability.
Mr Mohit Saraf, Co-chair, FICCI Corporate Laws and Stressed Assets Committee and Senior Partner, L&L Partners, said that FICCI had presented a paper on Judicial Reforms last year to the government which included a suggestion on coming out with a policy on resolving pending tax litigations and thanked the government for considering the suggestion in Union Budget 2020-21.
He expressed hoped that the abolition of Dividend Distribution Tax would bring in greater foreign direct investments as well as portfolio investments into the country.