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New Delhi, Feb.17 (ANI): Revenue Secretary Dr. Hasmukh Adhia on Wednesday said that from the taxation perspective, Union Budget 2016-17 would aim to promote growth, employment and provide a level playing field to Indian domestic manufacturers.
Replying to questions regarding taxation and the related issues and the expectations from the forthcoming budget in an interaction with a television channel, Adhia said the thrust of the budget would also be on Make in India as well amongst other things.
Commenting on tax collections target during 2015-16, Dr.Adhia said that the government will be able to achieve the overall tax collections target of Rs. 14.4 lakh crore for both i.e. direct and indirect taxes.
He said this will be the first time after a gap of five years that the government will be able to achieve the budget estimate (B.E.) target of tax collections during 2015-16.
Dr. Adhia mentioned that out of overall target of Rs. 14.4 lakh crore, about Rs. 8 lakh crore was the target for direct taxes and Rs. 6.5 lakh crore for the indirect taxes during 2015-16. In case of Direct taxes, Corporate Income Tax accounted for about 59 percent of the total and personal income tax accounts for about 41 percent.
The revenue secretary also informed that this year, the structure of indirect tax collections is skewed due to the fall in the international prices of the crude oil and scope for raising excise duty on the same. As a result, the share of excise duty jumped to 39 percent of indirect taxes.
In reply to a question about the reason for low direct tax collections, Dr. Adhia said the reasons for the shortfall in direct tax collections by around Rs. 40,000 crore was mainly due to corporate earnings not being as robust as expected.
He said that the growth in direct tax collections till January 2016 in current FY 2015-16 over last year was 11 percent compared to growth of 33 percent in case of indirect taxes in the same period.
The increase in indirect tax collections will enable the government to meet the shortfall in direct tax collections and meet the overall tax collection BE target for 2015-16, Dr. Adhia added.
Dr. Adhia further said that an increase in the indirect tax revenue collections during 2015-16 such as the rise in collections of service tax on banking and financial services by 45 percent and rise in Customs duty collections due to import of machinery by 25-30 percent indicates rise and growth in the overall economic activity in the market.
In response to a question on widening of the tax base, Dr. Adhia said that the figure of three percent to 3.5 percent of the total population only paying tax must be analyzed in the context of the total working population.
A large section come from agriculture, BPL and small enterprises who are not liable to pay tax as their income falls below the exemption limit i.e. Rs 2,50,000.
However, due to Tax Deduction at Source (TDS), many more people are paying tax even though many of them may not be filing their tax returns. He said that currently, 3.5 crore to 4 crore people are filing the income tax returns, and 1.85 crore to 2 crore people pay tax through TDS bringing the total number of the tax payers close to 6 crore. He said that total number of the tax payers have nearly doubled in last 3 year period which is a big achievement.
Dr. Adhia also highlighted the use of information technology to address the administrative hassles in filing tax returns as well as in dealing with other tax related matters.
He said the Central Processing Centre (CPC) in Bengluru received more than 90 percent of income tax returns online this year and added that the use of information technology has made possible processing of 3.27 crore assessments of the tax returns till December 31, 2015.
On the question of harassment, Dr. Adhia stated that less than one percent of the total tax returns are randomly selected for scrutiny and given a notice. These are mostly big cases. Ninety nine percent of the cases are not scrutinised and returns are accepted as filed by the assesses, Dr Adhia added.
