Jaitly asks taxmen to ‘gently squeeze’ parallel economy, cast net wider

Finance minister Arun Jaitley on Monday asked the income-tax department to take steps to increase the tax base while also ''gently squeezing" the parallel economy to bring out unaccounted money.

Inaugurating the 31st annual conference of income tax department in the capital, the finance minister complemented the revenue department for achieving a nine per cent increase in tax collections.

He, however, said there was sufficient scope for increasing tax base.

The two-day conference of principal chief commissioners, principal directors general, chief commissioners and directors general of income tax is focusing on non-adversarial tax regime, expeditious settlement of tax payers' grievances and significant expansion of tax the base.
 
Jaitley, however, told the taxmen that the "parallel economy" should be squeezed in a "fair" and not in a harsh manner.

The government will, in the next Parliament session, take all steps to enact the domestic anti-black money law, he said.

Direct tax collections recorded 9 per cent growth last fiscal and Jaitley expressed confidence that the targeted 14-15 per cent growth for current fiscal would be met given the current buoyancy in tax collections and improved GDP growth.

Jaitley also said a wider tax base and improved tax collections would enable the government to spend and give rate concessions to honest taxpayers.

On the black money law recently enacted by Parliament to bring back unaccounted funds stashed abroad, Jaitley said that honest taxpayers need not worry as it was aimed at only those who had stashed assets abroad.

It is only those who had defied the system in the past who have to now worry, he said.

Revenue secretary Shaktikanta Das, meanwhile, asked the CBDT to put together a "strategy paper" for elimination of tax exemptions provided to corporates.

This strategy paper will help the government prepare a road map for elimination - in a phased manner - of income tax exemptions provided to corporate, Das said at the conference.

The main reason for tax disputes between corporates and the income tax department is the issue of "exemptions", Das pointed out.