Centre wants to widen taxpayer base

Finance Minister Arun Jaitley in his Budget speech emphasised on increasing the taxpayer-base, while ignoring the widely expected increase in the taxfree slab for the individual taxpayer, along with sidelining the reduction in the corporate tax rate.

On the other hand, corporate tax for SMEs with turnover of up to Rs 50 crore has been cut to 25%, with 96% companies expected to benefit from it.

“I don’t think that companies will be dampened by the non-reduction of corporate tax rate, as most of them didn’t expect this, following demonetisation,” Suresh Surana, Founder of RMZ Astute, said.

He also added that the government is trying to reduce the corporate tax rate in a phased manner.

Jaitley in his speech said that direct tax collection is not commensurate with the income and consumption pattern of the Indian economy. “As against estimated 4.2 crore persons engaged in organised sector employment, the number of individuals filing returns for salary income are only 1.74 crore. As against 5.6 crore informal sector individual enterprises and firms doing small business in India, the number of returns filed by this category are only 1.81 crore,” he said.

Commending Jaitley, Institute of Chartered Accountants of India President Devaraja Reddy said, “This Budget is very well-balanced and focused on increasing the tax-payer base.”

“The Budget seems to have given more thrust towards increasing the tax compliance by broadening the tax-base rather than raising tax rates, which brings some fresh air to the Budget process,” Sachin Menon, Head of Indirect Tax at KPMG India, said.