New I-T structure to benefit 80% individuals, says Revenue Secretary

Our Bureau Mumbai | Updated on February 07, 2020

Govt keen on exemption-free lower I-T regime, says Nirmala Sitharaman

The government expects about 80 per cent of individual tax payers to benefit from the proposed new tax structure announced in the Union Budget.

The government had run simulation on 5.78 crore of I-T returns filed in last financial to find the impact of the new tax structure on them.

Ajay Bhushan Pandey, Revenue Secretary, said "based on our simulation it was found that 69 per cent of individual tax payers would have saved up to ₹74,000 per head by shifting to the new tax regime”.

Moreover, he added the impact would be neutral on another 11 per cent tax payers but are expected to switch to new tax structure as they do not have to take the trouble of compliance and maintaining proof on investments.

In all, about 80 per cent of tax payers would benefit from the new tax regime, he said answering questions at an interactive section headed by Finance Minister Nirmala Sitharaman.

The Finance Minister said the days of channelising investments to specific avenues for tax benefit have to be done away with as individual tax payers are smart enough to decide what is good for them.

The government is working on having an exemption-free lower income tax structure that would benefit all and the new tax regime is a preamble, she said.

On suggestions to withdraw long term capital gains tax, Sitharaman said since it was levied recently there are no substantial trend to gauge whether the long-term tax has benefited the exchequer, the government would wait before taking a view.

On Indian promoters being taxed upwards of 50 per cent after shifting dividend distribution tax to individual investors, Sitharaman said the move will benefit small investors more who are on the lower tax bracket and the government can do very little to save Indian promoters.

On a follow-up question of Indian promoters stopping to pay dividend due to the adverse impact on them, she said if the companies do not pay dividend they have to invest the money somewhere and if they don't, investors would stay away leading to mark down in the company’s valuation.

The government has managed to redress 90 per cent of Central excise and service tax dispute under the Sabka Vishwas programme launched in the last Budget. Similarly, modalities will be worked out to resolve direct tax disputes through the the Vivad se Vishwas programme.

The scheme offers a complete waiver on interest and penalty to the taxpayers who pay their pending taxes by March 31. The scheme aims to benefit those whose tax demands are locked in dispute in multiple forums.

The government is planning to work with the mutual fund industry to make process of investment in mutual fund schemes simpler.

Published on February 07, 2020

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