After getting declarations of Rs 65,250 crore under the Income Disclosure Scheme (IDS), the tax department is planning more measures to curb black money in the economy. In an interview with Sunny Verma and Anil Sasi, Rani Singh Nair, chairperson of the Central Board of Direct Taxes (CBDT), discusses the steps being contemplated to widen the tax base. Excerpts:
After the IDS, what other measures are you planning to address the black money problem?
We have just done IDS and we already have our enforcement functions, also the changes in the law which have been there with PAN quoting, with TCS (tax collected at source), so there are all steps for combating black money.
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What specific steps is the government taking to widen the tax base?
As far as we are concerned, it is an ongoing exercise of deepening and widening the tax base. We have been doing it for the past few years, and this was one-time compliance for the taxpayers to come voluntarily, and we will keep widening and deepening because that’s our job, that’s what we are supposed to do, so we do it. And we have been mandated to increase the number of taxpayers and the tax-to-GDP ratio in India is on the lower side. So we have to. We are about 17 per cent and for most Asian countries it is about 24-25 per cent. So there is an effort to see that all the people who should be paying taxes are in the tax base and as on date we have about 7.4 crore (taxpayers) because people who file the return and people who pay their TDS and do not file returns. We are trying to increase.
Will the government tax agriculture income above a certain threshold?
Well the Budget exercise is going to be on, you are writing a lot about it. But agriculture income is by covered by the Constitution, so it needs to be examined before we take a decision.
Is the department currently capturing data on agriculture income?
Normally we are capturing agriculture income and we apply it for rate purposes. So it is getting captured in our system. And we do spot verification under our CASS (Computer Aided Scrutiny Selection) scheme, so whichever case is picked up for agriculture income the necessary inquiry is done along with other issues also to see that it is genuine agriculture income.
Are you considering the SIT (Special Investigation Team set up to suggest ways to curb black money) suggestions on imposing Rs 3 lakh limit on cash transaction and Rs 15 lakh cap on cash holding?
See whatever the suggestions come from SIT, we examine it in the government and then we implement it as and when the government has examined it. So these proposals will also be examined and then a decision will be taken.
The SIT also suggested amendment in the foreign black money law to enable the department to confiscate overseas properties of defaulters?
Under the foreign black money law also we had made it a predicate offence of holding black money abroad and if its a predicate offence, it will always be confiscated. So that provision is already there.
Will IDS collections help beat direct tax collections target?
This is the first time the tax collection will come in two parts, 50 per cent till March 31 and another 50 per cent by September 30, 2017, as FM had already said that at that time we had not factored in any collection from IDS in our budget, so yes it will add to our collections and lets see how we go forward during this financial year.
Was there an internal target for IDS?
There was never an internal target. The government did not give us an internal target. We were working to maximise this scheme to its utmost potential.
There were reports on small taxpayers facing problem.
I think we should be conscious of business realities. People who are running small shops also may be having large income. There are certain eateries which are very popular and they generate a lot of money and owners of these cannot be termed small taxpayers because of the income and assets they have. So I think there should be responsible reporting also, I have not come across and I have been monitoring every aspect of IDS, of a small person being harassed, wherever there is a complaint we look into it. As a department we would want to maximise IDS, why would we go to a small taxpayer, its illogical. We were focused on the information that we have used and we worked on that.