'Grease wheels for honest taxpayers; Act strict with tax evaders', FinMin calls for better tax policy on Income Tax Day

New Delhi, July 24: "Those gaming the system are the ones to keep a watch on. I am fully with the three wings of revenue department, if they really are firm on gaming”, said Finance Minister Nirmala Sitharaman on July 24, asking the Income Tax Department, Enforcement Directorate and the Directorate of Revenue Intelligence to work closely for better tax administration.

 

If only these three wings shared the information about an assessee, the Centre would have no businesses but to send an electronic claim and money was to reach automatically, she said at the celebrations of Income Tax Day in New Delhi today.

 

 

“The whole business is about trust, with the person who is paying the tax, who is helping build the country, and you are facilitating the process. It should strictly be as simple as that”, Sitharaman said addressing the Income Tax Department officials in particular.

 

Explaining the rationale behind increasing the tax for super-rich, the minister said the tax was not a punishment, but was collected with the intent that those with high earnings could contribute more towards nation building.

Further she stressed at the direct tax collection target being Rs 13.35 lakh crore and affirmed that the one set in the 2019-20 Budget was achievable. "We have given a very easy target. If in the last five years, you could double, what we have given you this one year is nothing at all. So, somewhere between Rs 11.8 lakh crore to slightly over Rs 13 lakh crore, which is no big deal at all. You have not been given a big target”, she said, who presented her first Budget on July 5.

 

Asking the tax officials to be firm with tax evaders and act as facilitators for honest tax payers, she indulged in a bit of wordplay to drive home the point. "If avoidance and evasion are two things in your mind, 'a' and 'e', of the five vowels, then the other three letters come into play are 'i', 'o', 'u'. No avoidance and evasion, then you owe the assessee a good service, facilitation”, she added.

Signing off for the forum, the Finance Minister asked tax officials to be sensitive in dealing with cases of tax evasion. "If the three departments among yourself share the information, the sovereignty would be better enabled to become facilitator of taxpayer. This being the larger message of what the Prime Minister feels that we should be seen as facilitator, we want the income tax but we should clearly not be in an overdrive,” she said.

In 2019-20 Budget, the FinMin increased to 25 per cent the surcharge on income between Rs 2 crore and Rs 5 crore and to 37 per cent on income above Rs 5 crore. The increase works to an the effective rate of 39 per cent for the Rs 2-5 crore income slab and 42.7 per cent for those earning more than Rs 5 crore a year.