Announcing a few more tax concessions, finance minister Arun Jaitley on Thursday said the government is committed to low tax regime to promote industrial activity to generate jobs and create more resources to undertake social welfare activities.
Responding to the discussion on the finance bill in Lok Sabha, the finance minister said high tax rate of 20 per cent on the debt mutual fund would apply from July 10, the date of the presentation of the Budget, and not from April 1, 2014 as proposed earlier.
In this regard, Mr Jaitley said he was 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.
The Lok Sabha later passed the Finance Bill 2014, completing the budgetary exercise in the Lower House.
In order to provide some relief to the taxpayers filing returns late and paying penalty on daily basis, the minister said that CBDT would be empowered to exercise discretion in this regard. He also expanded the scope of Settlement Commission to include cases where proceedings have already been initiated.
Rebuffing his own party MP Nishikant Dubey for saying that “we will not be able to bring back black money from Switzerland in our lifetime”, Mr Jaitley said, “We pray for his long life, but we will not have to wait for long (to get back black money from abroad).”
Justifying his emphasis on having low tax regime and smooth tax system, the finance minister said the government wants to revive the investor sentiment “which has been disturbed” and mop up additional resources to fund social welfare activities. He said low tax regime would make Indian goods competitive and cited China as an example in this regard.
Highlighting the changes brought in the Finance Bill, the finance minister expressed that they will “further simplify and smoothen the tax structure of the country and help us in raising the revenue” because this year “we need a higher revenue itself to meet the fiscal deficit targets”.
As regards the proposal on the Settlement Commission, Mr Jaitley said it would take up “cases where proceedings have been initiated for reassessment and proceedings which are pending for fresh assessment in pursuance of an order of a tribunal or a commissioner for setting aside or cancelling the assessment itself”.
In order to reduce mounting tax litigation, Mr Jaitley said he proposed to provide for more benches of advance ruling to deal with transfer pricing disputes.
Seeking to boost the wind energy sector, he announced extension of the accelerated depreciation benefit to the sector as demanded by members.Responding to the concerns expressed by members over tax forgone, Mr Jaitley said it was permitted by law and eventually it benefits consumers and make domestic products price competitive.
Rejecting the Opposition charge that the government was giving tax relief to benefit corporate, Mr Jaitley said it was a “misnomer” as tax concessions lead to reduction of prices and finally consumers get the rebate.