Moral hazard

Instead of immunity, India needs simpler tax laws

The government is reportedly planning to come up with an immunity scheme for direct tax assessees in the upcoming Budget. The scheme will allow them to declare any additional income in the past five-six years without facing penalty or prosecution. The idea has been proposed by the direct tax task force. The government expects that the scheme will help generate revenues of about Rs 50,000 crore in the first year of implementation, aside from improving compliance. The motivation for the government is not very difficult to understand. It is facing a significant shortfall in revenue collection in the current fiscal