‘Small companies have a much higher tax liability’

MUMBAI: The government is working towards increasing the taxpayer base, as well as curbing the use of black money. For this, the tax department is already reaching out to people, and the younger generation is already adapting to the change, CBDT chairperson Rani Nair told HT. Excerpts from an edited interview.

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The on­going black money declaration window has seen a lukewarm response.

In the initial months, the emphasis was on outreach programmes, educating and telling the benefits of the scheme that accrue to taxpayers. As we approach the end of the scheme (around 40 days are left), we are seeing interest from people. We have issued a series of FAQs, and will come out with another set of clarifications this week. Since this is a voluntary scheme we have to wait for it to get over to assess its success.

There have been a lot of measures earlier to curb black money, but they have not yielded desired results.

A lot of work has been done in the recent past to curb black money — PAN disclosures for various transactions have been made mandatory, 1% tax collected at source (TCS) has been levied for cash transactions exceeding ₹1 lakh and Benami Bill has also been cleared by Parliament, among others. Even GST will help curb black money as it will bring unaccounted transactions under a tracking system. Black money is a social evil, so there is need to change the mindset of people. The younger generation is already adapting to this change, they do not want to use cash for transactions, they want to use cards and avail benefits of electronic payments.

The CBDT initiated the drive, PAN for all, last year. What is the current status?

We have issued over 25 crore of PAN card already. We have made PAN application process completely online. For new PAN-related measures, you will have to wait for the Budget to spell it out. The use of PAN will make it difficult for black economy to exist in the country. We have also started looking into non-PAN data of high-value transactions to identify potential non-filers or tax evaders.

The department is yet to issue a roadmap for corporate tax reduction.

Today, more than the large corporate houses, it is the small companies, which have a much higher tax liability — around 28% to 29%. In Budget 2016, the finance minister announced measures to bring down the tax liability of smaller companies. The roadmap is clear and we will slowly phase out the exemptions. All new companies can opt for 25% tax rate without claiming exemptions.

Can we see a further reduction in the upcoming Budget?

Let the Budget process start in September. The finance minister has already announced the roadmap and we will work towards it.

PM Modi has sought to double the taxpayer base to 100 million. By when is it possible?

We cannot have a set date for this, but the department is working towards it. Last year, 45 million people paid taxes. This year till date, 22.7 million returns have already been received, which is 9.8% higher than the same period of the previous year.

The tax base for direct taxes has grown to over 60 million, which includes tax return filers as well as those whose tax has been deducted at source.