Widen tax net at top end: FM

Finance Minister P Chidambaram today said the government would push for bringing in more people earning over Rs 10 lakh a year into the tax net.

This, he said, would be done as the government continued with its agenda of moderating tax rates, improving administration and tightening enforcement.

At a function to launch an online system for paying central excise and Customs duty, Chidambaram said the revenue department and the industry chambers were working together to persuade large excise assessees to join the new system. Nearly 90 per cent excise were raised from 5,500 large assesses out of a total 100,000 excise assessees, he added.

Chidambaram said moderation of tax rates was dependent on widening of the tax net. "There are only 80,000-85,000 individuals who admit to an income of Rs 10 lakh or more. I am sure the number is much higher than that. We must find those with large incomes to pay taxes," he said.

"If non-tax payers pay taxes, tax rates could be further moderated....Tax rates must be moderate, tax administration should be user-friendly and enforcement impartial and strict," he said. Those not paying taxes would be eager to pay up if the administration was impartial and user-friendly, he added.

He said help centres for small tax payers and e-payment facilities were steps in this direction. For large companies, the government proposes to set up big taxpayer units where all taxes can be paid under one roof.

The minister said in the coming days, the revenue department would rely more on information and intelligence rather than on search and seizures to check tax evasion and avoidance.

"I believe in impartial enforcement. I don't believe in a heavy-handed approach. I don't like search and seizures, which belong to the past," he said.

He said taxmen would use the annual information report, the tax information network and the new bank cash transaction tax to track evaders.

Asserting that the government had kept its promise of carrying out reforms in both direct and indirect taxes, he said India would soon have tax rates that were the best in the world.

Chidambaram, however, took a dig at those who were still evading taxes saying tax evasion and avoidance had emerged as an "interesting business".

Five commercial banks, including ICICI Bank, HDFC Bank, Union Bank of India, IDBI Bank and UTI Bank, have launched online payment facilities.

The finance minister advised other banks, particularly those in the public sector, to follow suit.