Revenue secretary S Narayan has said the reduced 10 per cent exemption on income tax liability under Section 88 of the I-T Act will be totally eliminated in the next budget.
Speaking to Business Standard today, Narayan justified the drop in tax exemptions saying that income tax rates should not determine the flow of private investment into the economy.
He said, it is, therefore, essential that the department be able to track tax deduction at source (TDS) from salaries on line basis, since they account for more than 50 per cent of the direct tax collections.
He added in February the department had detected a fraud of about Rs 105 crore where the TDS made by the company had not been remitted to the government.
To achieve this, he said, he hoped to make a start by the first week of April by reconciling PAN-based transactions on line.
According to the secretary, the government has done exactly as was expected in Customs tariff rationalisation. He said a reduction in the number of slabs was never an option in the budget justifying the continuation of a zero rate of customs duty. He said that category included a lot a technical items like power for which the government was under an obligation to provide a zero Customs duty regime.
He also said that by another couple of years the number of rates in indirect tax should come down to less than 20 making the budget preparation an entirely transparent exercise.
On excise he said the concessions given to textiles, housing, tourism, and steel should create tax buoyancy in the economy in the current fiscal. He said since in the rural sector the repair and replacement of housing stock constitute a big demand source, a tax incentive given by the budget should give a big boost to demand for cement and other housing materials.
Referring to the putting up of the proposed depreciation rates on the web, yesterday, Narayan said the department has institutionalised the system of asking for comments from the concerned parties before finalising the rules.
