Ahead of the Budget, Finance Ministry today said tax exemptions cost exchequer about Rs 2 lakh crore annually and it is necessary to phase them out to provide a level playing field to domestic manufacturing companies so that Make in India can become a success.
"The focus of the budget should be on tax rationalization and simplification. The focus should be on promoting growth, employment and in terms of giving some sort of level playing field to domestic manufacturers so that the Make In India can happen," Revenue Secretary Hasmukh Adhia said.
His statement assumes significance as Finance Minister Arun Jaitley is getting ready to unveil 2016-17 Budget on February 29.
Removal of tax exemptions, Adhia said, would able the government to reduce income tax rate and give a more fair deal to people paying taxes.
"In direct tax, we are losing about Rs 1 lakh crore in these exemptions. The cause may be noble, but it distorts the taxation system. In case of indirect tax also, we are almost losing Rs 1 lakh crore because of various exemptions given for SEZ, EOU.
"... Had we not given all these exemptions we would have been able to probably reduce the income tax rate and we would have been given a more fair deal to people in paying the same thing," Adhia said in Finance Ministry's YouTube channel.
The tax department has already come out with a draft roadmap for phasing out tax exemptions, and the final roadmap would be unveiled in Budget.
"We cannot completely eliminate exemptions... If we are able to reduce the number of exemptions, then the amount we are losing in exemptions we would be in a better position to reduce taxation rates...
"Exemptions create inequity, it creates inequity between the existing unit and the new unit which is availing the exemption and it also creates inequity in terms of smaller companies and bigger companies," he said.
Adhia said removing the exemptions would also help in improving the tax: GDP ratio which is currently around 10 per cent.
"There is a need to increase the tax: GDP ratio but you also have to see the capacity of people to bear that kind of taxation burden. If we simply rationalise the taxation system and remove the exemptions, I am sure the tax to GDP ratio can be enhanced substantially," he added.
In order to attract foreign investment, Adhia said there was a need to do away with multiplicity of central and state government levies and the only solution to this is GST. Goods and Services Tax would usher in an unified indirect tax regime which will subsume various levies like excise, service tax, sales tax, octroi, etc.
He further added, "Our vision is to build products that
are consumer-centric and offer ease and convenience in the long run. The app is designed to help users calculate their taxes and even plan their tax savings for the year."
The newly launched app comes with an array of amazing features:
- It integrates seamlessly if one starts the app and completes the filing process on a web platform
- Chatting ability found among smartphone users has been tapped in this new app to help users file their taxes as easily as they chat online
- Filing completion status that indicates progress It aims to enhance the overall customer experience in tax filing, by offering a chat-based feature with personalization.
Talking about the app, Devesh Shrivastava, Country Head-IT, H&R Block India said, "The app is more than an avatar. Instead it has its own personality and is named 'Birbal' - after the witty advisor to Emperor Akbar. The interface is uniquely designed to extract required information and helps resolve all tax queries. It is optimized to work on different devices and has all the functions available on its web platform too."
'Taxchat' is innovated and developed collaboratively in-house with inputs and expertise of highly qualified tax advisors of the company.
The app is currently available to all Android users and can be downloaded through Play Store:
https://play.Google.Com/store/apps/details?id=com.Aexonic.Hnrb lock&hl=en or can be directly accessed through our web url: http://www.Taxchat.In About H&R Block India Pvt. Ltd.
H&R Block (India) Private Limited is the largest consumer tax filing company in India. It provides tax services like Expert Online Tax Preparation, Income Tax e-Filing Online (Free), In Person Tax e-Filing, NRI Tax e-Filing, US Tax Filing in India, Tax Consultation and Scrutiny to individuals including non-residents (NRIs) and expatriates. It has become one of the largest individual tax services companies in India in a short span of four years.
