Don't misuse Income Tax laws, rates already low: CBDT to industry
CBDT chief Sushil Chandra on Monday asked the industry to refrain from misusing provisions of laws to evade taxes, saying the effective tax rate for...
NEW DELHI: CBDT chief Sushil Chandra on Monday asked the industry to refrain from misusing provisions of laws to evade taxes, saying the effective tax rate for big companies is already 26 per cent on account of various exemptions.He said the industry should act more responsibly than the salaried class in paying taxes and help build a tax compliant society.
"I want to drive home that point very clearly before the industry that you should be more tax compliant, automatically rates will come down. We are ready to move with you for making the society tax compliant. Industry has got much more responsibility than salary earning person," Chandra said while addressing the CII post-Budget meet.
In 2018-19 Budget, Finance Minister Arun Jaitley proposed to lower corporate tax rate to 25 per cent for businesses with turnover of up to Rs 250 crore.
Over the last three years, the government has announced reduction of taxes in a phased manner for various categories of corporates and currently only 7,000 corporate houses are still in the 30 per cent slab.
However, Chandra said that the effective tax rate for large companies works out to be 26 per cent after taking into account various exemptions which they enjoy.
"26 per cent is the tax rate for bigger companies after exemption, because all exemptions cannot go overnight... So we have covered all the companies into low tax regime that is 25 and 26 per cent, so rates are quite good at this moment," Chandra said at the CII post-Budget meet here.He further said that had the government cut tax rates for all corporates to 25 per cent, then the cost to the exchequer would have been Rs 60,000 crore.
The Chief of Central Board of Direct Taxes (CBDT) said that despite the government coming out with anti-black money measures and picking up lesser number cases for scrutiny, there are people who are misusing the income tax law provision.
"I would urge the industry that you should not yield to the temptation of misuse of sections so that at least our work of adding the anti-abuse provisions should be reduced and one-fourth of the Budget work can go away.
"When the law is so simple, when rates are reasonable, which the industry generally asks from us ... Now I'm asking from you (industry) that at least be tax compliant," Chandra said.