New Delhi: Taking cognizance of the probable reason for tax evasion of the salaried class, the government may do away with the need to provide proof of investment on tax deductions in the Union Budget on Thursday.
Experts are of the opinion that one of the reasons why many salaried and other middle-income groups avoid paying taxes is that they have to go through a lot of paperwork.
The NDA government will be presenting its last full-fledged Budget on February 1 before the 2019 Lok Sabha elections.
"The income tax department has received a lot of request on this and there has been quite a few rounds of discussions as to why one needs every individual to submit their details in a technologically advanced era when information about a taxpayer is available at the click of a mouse," a senior official said.
This is one of the reasons why the government has made provisions to link the Aadhaar with banks accounts, insurance policies and other investments. Linking PAN with Aadhaar is also a step towards helping the public on this, the official told Deccan Herald.
He, however, added that a final decision will be taken by Finance Minister Arun Jaitley on whether to introduce the new measure this year itself or the next.
After an amendment to the income tax rules, the government had also recently empowered tax officials to use banking, insurance and municipal corporation database to obtain details about taxpayers or defaulters.
According to a set of official data released late last year by the Income Tax Department, just over two crore Indians, or about 1.7% of the over 120 crore people in the country paid income tax in the assessment year 2015-16.
In case of a salaried person, an employer seeks the proof of actual investments from the employees every year.
Based on this, the tax is deducted from an employee's salary. To save taxes, the employee takes recourse to various tax saving instruments under the Income Tax Act of 1961.
In this year’s Budget, Jaitley is also expected to tweak income tax slabs to do away with various deductions. The expectation is he will raise income-tax exemption from Rs 2.5 lakh to Rs 3 lakh or above.
Hopes of the middle-class have been bolstered by the finance minister's recent remark that 2018-19 will be the year of reaping benefits of the reforms undertaken in 2016-17. "The country is going to get enormous benefits from the reforms," Jaitley said had in his New Year message.
Comments
0 comment