In news that would make taxpayers happy, the Finance Ministry has indicated there could be relief for the middle-class in the Budget either next year or the one after.
Speaking exclusively to Business Today TV’s Siddharth Zarabi, Revenue Secretary Tarun Bajaj said, “If the wheels of the economy keep moving, we will have better GDP growth, better income and better expenditure and maybe in the next year or the year after that we can think of giving relief to the middle class”.
This assertion comes at a time when middle-class taxpayers have expressed some disappointment with Budget 2022-23 for not providing any major tax relief measures, contrary to expectations that Finance Minister Nirmala Sitharaman would ameliorate some of the pandemic hardships of the last two years.
A Business Today TV poll had 62 per cent respondents say that they were disappointed with absence of any income tax relief measures in the budget, while 27 per cent supported the government in its inability to extend any relief measures.
Bajaj said the government was faced with the difficult choice of either giving some relief to the tax payer or spending the revenue on the vulnerable sections of the society. “We thought it’s better to spend on capital expenditure to keep the wheels of the economy moving”, he said, adding that the government was targeting food and fertilizer subsides for the poor.
In the other big announcement, the North Block mandarin said the government has enough data on taxpayers to pre-fill their income tax returns from the next financial year. Though this makes the process of filing the income tax return simpler, it also indicates that the taxman is watching and it will be harder to evade taxes. “We have a lot of information like interest from bank accounts, sale of property, equities, etc. Rather than asking you to do the calculations, we will have it there. But, you will have the option of revising it”, the official added.
Another precision tracking tool in the government’s arsenal is tax deducted at source (TDS). The deductions under this head, which range from 2-10 per cent, have supplied enough information to the I-T department on individuals with taxable income. To ensure these individuals file their tax returns, Bajaj says the government has “created a law and a utility that the next year, TDS will be at double the normal rate if the I-T return has not been filed”.
The government is also looking at slowly moving to a non-exemption regime. Last year’s Budget had introduced a new tax slab for individuals who did not opt for exemptions and preferred to file I-T returns with a simpler, straight-forward calculation. According to Bajaj, though full information is not available yet, “people with incomes below Rs 8-9 lakh will not have moved because exemptions helps them pay no taxes. But people with higher income will move to the new regime if they do not take housing loans, leave travel allowance exemptions.”
The Revenue Secretary also expressed confidence that the new Direct Tax Code, pending for the past many years, will finally be in place by 2024.
Copyright©2023 Living Media India Limited. For reprint rights: Syndications Today