Sinha's bid to widen tax base
Finance Minister Yashwant Sinha also introduced a scheme called
'one-by-six' as a significant initiative to widen the tax net during the fiscal
year 1998-99.
This forms a revision of the scheme introduced last year in 12
important cities whereby a person possessing a house, a telephone,
motor vehicle and spending on foreign travel was liable to file an
income tax return.
Two more parameters, namely, holding of credit card and membership of expensive clubs, has now been added to this and the scheme is proposed to be expanded to 23 more cities in India, taking the total coverage to 35 cities.
This is proposed to be a significant initiative in tax widening efforts and is expected to raise the total number of individuals filing their income tax
return by at least 50 per cent. The total number of assessees at present
constitutes less than 1.25 per cent of the population.
The finance minister has also proposed for the first time the
introduction of one-page taxpayer-friendly return form called
'Saral' for all non-corporate tax payers. Saral will be made popular
through voluntary compliance and assistance of NGOs with the use of
mobile vans for important cities with the aim of on-the-sport tax
collection.
As a measure to prevent tax evasion, Sinha has proposed a new
initiative in making it obligatory for assessees to quote their PAN
or GIR number mandatory in respect of certain high-value transaction
namely, purchase and sale of immovable property and motor vehicles,
transactions in shares exceeding Rs 50,000, opening of new bank
accounts, fixed deposits of more than Rs 50,000 applications for
allotment of telephone connection, and payment to hotels exeeding Rs
25,000.
Sinha also today proposed introduction of two new schemes for better tax compliance.
While the Samadhan scheme offers waiver of interest, penalty
and immunity from prosecution on payment of arrears from direct tax
at current rates, the Samman scheme is a recognition of honest
tax payers, Sinha said in his Budget speech.
Samadhan will apply to both direct and indirect taxes. In respect
of indirect taxes, where the adjustment rates have been very sharp,
an abatement of 50 per cent of the duty would be available along
with waiver of interest, penalty and immunity from prosecution.
The Samman scheme seeks to create a sense of pride in tax payers and
a social recognition to the contribution they are making to the
national cause. The finance minister said the details of the
facilities and recognition to be conferred on the tax payers and PAN
(permanent account number) holders would be announced separately.
Budget '98
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