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Informist, Wednesday, Aug 21, 2024

 

--Sitharaman: Taxman's power should be used judiciously 

--Sitharaman: Taxman's notices should not scare away taxpayers 

--CONTEXT: Finance Minister Sitharaman at 165th Income Tax Day event 

--Sitharaman to tax officers: Don't take disproportionate actions 

--Sitharaman: Should look at expediting tax refund process 

--Sitharaman: There is room to improve current tax refund process 

--Sitharaman:Have a lot to contribute to intl Pillar II taxation talks 

--Sitharaman: Need to get a grip on how intl taxation is moving 

 

NEW DELHI – The "simpler" new income tax regime, introduced in 2020, is helping the government to widen the tax base, Finance Minister Nirmala Sitharaman said today. "More and more" taxpayers are shifting to the new tax regime from the old one, with first-time taxpayers preferring the new regime, she said addressing the 165th Income Tax Day event.

 

According to government data, about 72% of the taxpayers who filed income tax returns for the assessment year 2024-25 (Apr-Mar) opted for the new tax regime. The new simplified tax regime offers lower tax rates but has very few deductions. Though the rates are higher under the old regime, taxpayers can claim deductions under various sections of the Income Tax Act.

 

The government has been offering various sops for the new income tax regime to wean taxpayers from the old regime. The Budget for 2024-25 provided tax savings of up to 17,500 rupees under the new regime. Sitharaman said on Jul 23 that the government is yet to decide on the sunset date for the old tax regime.

 

Speaking at the event today, Sitharaman said that the tax department should look to expedite refunds as there is room to improve the current refund process. The government has issued direct tax refunds worth 1.202 trln rupees between Apr 1 and Aug 11, up 33.5% from the corresponding period a year ago. 

 

The taxman's power should be used judiciously and notices sent by the tax department should not scare away taxpayers, she said. The language used in the notices by the tax department can scare assessees, she said, adding that the language needs to be simpler and easier to understand.

 

"Languages used in tax notices and letters should not be so convoluted and technical," the finance minister said. Sitharaman asked the tax department to provide an explanation to companies and individuals why the notices are being sent.

 

She also asked the tax officers not to take disproportionate actions. 

 

Sitharaman said that India needs to get a grip on how international taxation is moving, and the country has a lot to contribute to the international 'Pillar Two' taxation talks. Pillar Two, which was endorsed by the Group of 20 Nations in 2021, is a global tax agreement to ensure large multinational companies pay a minimum level of tax on the income arising in each jurisdiction where they operate.  End

 

Reported by Priyasmita Dutta and Sagar Sen

Written by Shubham Rana

Edited by Saji George Titus

 

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