News Column

FM tries to soothe worried taxpayers

July 28, 2014

UNION finance minister Arun Jaitley announced some concessions for the mutual fund (MF) industry and income taxpayers on Friday while pledging that the government would stick to a lowtax regime to promote industrial growth and create more jobs.

In order to provide some relief to taxpayers who are late in filing returns and end up paying hefty penalties calculated on a daily basis, Jaitley said that Central Board of Direct Taxes (CBDT) will be empowered to exercise discretion.

Jaitley said that for late filing of returns there is a provision which has become onerous as a huge penalty and there are no powers of waiver itself leading to an "extremely exorbitant" penalty. "So, some discretion is given to the CBDT with regard to that penalty where cases of late filing of returns were involved.

The penalty as such will remain," he explained.

Announcing the concessions in the Lok Sabha, Jaitley said that the high tax rate of 20 per cent on the debt mutual fund will apply from July 10, the date of the presentation of the Budget, and not from April 1, 2014, as proposed earlier.

In this regard, the minister said that he is accepting a suggestion made by Congress leader Jyotiraditya Scindia and some other members as it amounted to levying tax with retrospective effect for about three months.

In order to reduce mounting tax litigation, Jaitley said that he proposed to provide for more benches of advance ruling to deal with transfer pricing disputes.

The changes proposed in the Finance Bill, Jaitley said, will further simplify and smoothen the tax structure.

Referring to the General Anti-Avoidance Rule (GAAR), Jaitley said that he will take a final call on it.

Implementation of GAAR was deferred by two years following widespread concerns by domestic as well as foreign investors.

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Source: Mail Today (India)

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