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The Central Board of Direct Taxes (CBDT) will soon find a solution to the vexed issue of ‘angel tax’, a top official said.
“The Working Group that has been set up is at it and has started work. Infact, it is having a meeting today. The solution will be ready soon,” Sushil Chandra, CBDT Chairman, said on the sidelines of an Assocham conference here on Thursday.
A mechanism has to be worked out to identify the “real start-ups” and “shortly we will find a solution”, he said.
Aadhaar-PAN
Replying to a query by an industry representative, Chandra said Aadhaar has to be linked with PAN and those who do not do it by March 31 will face the risk of their PAN getting cancelled.
“The Supreme Court has made it compulsory that returns be filed with Aadhaar. So far, 23 crore PAN have been linked with Aadhaar. There are still certain duplicate PAN which will be tracked and removed,” he added.
On demands from the MSME industry that all categories (including partnerships and LLP) with turnover less than ₹250 crore should be taxed at the same rate, Chandra said the Interim Budget had not changed any rates because the fiscal space was limited.
The CBDT Chairman made a case for better compliance from corporates, stating that higher compliance could lead to further moderation in rates.
Tax returns
So far this year, the Income Tax Department has received 6.31 crore income tax returns, he said. This was higher than the 5.44 crore returns filed in the previous year. Chandra also said that 95 lakh new tax payers have been added into the tax net, out of which 33,000 new taxpayers have been added in the last 15 days.
In the last four years, the number of tax return filers has increased from 3.5 crore to 5.44 crore, he said.
The Centre’s direct tax to GDP ratio was 5.98 percent last year which was highest in the whole decade.
Chandra felt there was scope for more compliance from high networth individuals and pointed out that only 1.5 lakh persons filed returns with income over ₹1 crore. This number was 88,000 persons in 2013-14.
Foreign assets
Talking about the efforts to encourage taxpayers to disclose their foreign assets, Chandra said the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act has a triggering impact and as part of the Common Reporting System (CRS) it has helped the Income Tax Department to identify many people who have created undisclosed foreign assets.
He appealed to the taxpayers and the tax consultants to fairly disclose foreign assets and income thereof under the assets schedule of their returns and cautioned that a failure to do so would invite prohibition under the Act. According to the Income Tax Department data, certain cases surfaced where foreign remittances of ₹10 lakh were made, but the taxpayers did not file the returns.
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