THE OLD SETTLERS OF SIKKIM

Govt could tighten tax laws in Budget, plug revenue gaps

Sapna Das, NDTV, 27 Jan 2012 | 05:06 PM

The government might miss its direct tax target of Rs 5,33,000 crore set for this fiscal. The government, as of date, has collected Rs 3,77,000 crore in direct tax revenue.



Further, according to CBDT officials, the government might also decide to bring in certain provisions of the Direct Tax Code, into the Finance Bill in the coming Budget.

it would then look to plug revenue leakages by in the Finance Bill for the new fiscal 2012-13 by tightening Direct tax laws.

The implementation of the Direct Tax Code (DTC) has been delayed by a year. This is because, the Standing Committee of Parliament on Finance, headed by Yaswant Sinha, is yet to submit their recommendations on the DTC.

However, this does not prevent the government from bringing in some of the measures proposed in the DTC into the next year's Budget. This could help establish the tax department's jurisdiction on overseas acquisitions. Provisions like the GAAR or General Anti Avoidance Rule could be announced in the Budget.

Justifying the government's flexibility on such a policy call, CBDT officials quoted the example of the hike in the Minimum Alternative Tax (MAT) rate in the last Budget. MAT was a fallout of the provisions in the DTC.

CBDT officials have also indicated that the government might miss its direct tax target, of Rs 5,33,000 crore set for this fiscal. The government, as of date, has collected Rs 3,77,000 crore in direct tax revenue. That amounts to 70 per cent of the Budget Estimate.

All these issues are likely to compel the government to tighten its tax policy and focus on revenue mobilization in the coming Budget.

CBDT also expects that the legislative work on the Direct Tax Code could begin in the Monsoon Session of the Parliament, if the Standing Committee submits its report, in the Budget Session slated to begin from 12th March.

CBDT officials have also denied that the government is planning a Voluntary Disclosure of Income Scheme (VDIS) like amnesty scheme, to help tax evaders disclose their unaccounted income stashed in foreign banks, overseas.