Tax department must trust taxpayers or face dire consequences: FM Jaitley

Jaitley warns taxmen to trust taxpayers

At the same time in a strong message to tax evaders, Finance Minister Arun Jaitley said such people would face serious action and that the government is plugging the escape routes.

  • New Delhi,  July 4, 2016  
  • |  
  • UPDATED   10:13 IST
Finance Minister Arun Jaitley

Finance Minister Arun Jaitley has said the government's intention is to keep taxation rate moderate and emphasised that the tax department needs to start trusting the assessees to increase the number of taxpayers in the country which currently stands at a mere 5.4 crore.

At the same time in a strong message to tax evaders, Jaitley said such people would face serious action and that the government is plugging the escape routes.

A senior IT official told Mail Today that the finance minister had on Saturday participated in a conference with the Institute of Chartered Accountants of India (ICAI) as they influence the mindset of tax payers and have to guide them in the right direction. The Finance Minister said, gradually the corporate tax would be brought down to 25 per cent so that all companies have surplus income which they can reinvest and increase economic activity and employment in the country.

The awareness programme on the Income Declaration Scheme, 2016 saw Jaitley addressing ICAI members along with senior CBDT officials through video conferencing.

About the Income Declaration Scheme 2016 - which can be availed till September 30 - Jaitley said it provides a good opportunity for anyone to disclose domestic income for which filing has not been made before.

"Once a return is filed, the source of income is not going to be questioned. Whatever disclosures are made they are not going to be used for any other collateral purpose or be shared At the same time Jaitley warns tax dodgers of dire consequences my biz with anybody... Confidentiality will be respected," he explained.

The scheme, which opened on June 1, allows domestic black money holders to declare their conealed wealth by paying a tax and penalty totalling 45 per cent.

Effective rate of taxation has become very reasonable and such an opportunity may not visit an assessee ever in future again where he will get the opportunity to pay taxes, a nominal penalty and convert all his assets to be tax-compliant, Jaitley said.

Speaking on the occasion, CBDT Chairman Athulesh Jindal said the ongoing disclosure and declaration scheme is not an immunity scheme and that any comparison with previous amnesty schemes would not be correct.

Jindal noted that in the last two years, more than Rs 40,000 crore of undisclosed income has been detected as a result of search and seizure operations and surveys. Prosecutions were also launched in 1,220 cases over the last two years, he said, adding that information sharing mechanism is also being strengthened.

According to him, after signing of FATCA with the United States, information flow from there has started. We are scrutinising the voluminous information received and effective utilisation of this information will be ensured, he added. The Finance Minister also said involved in the Liechtenstein and HSBC accounts which were held to be illegal, are now facing prosecution. Those holding illegal accounts as disclosed in the Panama papers will also meet the same fate.

In association with Mail Today Bureau