Announcing the concessions in the Lok Sabha, Finance Minister Arun Jaitley said 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. Must Read: Nation will not have to wait for long: Finance Minister on blackmoney
In this regard, the Minister 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.
Justifying his emphasis on having low tax regime and smooth tax system, the Minister said the government wants to revive the investor sentiment "which has been disturbed" and mop up additional resources to fund social welfare activities.
Regarding the changes proposed in the Finance Bill, Jaitley said, "We 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 because of meeting the fiscal deficit targets."
On his proposal for relaxing norms for late filing of returns, Jaitley said "for late filing of returns there is a provision which has become onerous as huge penalty (is levied) per day and there are no power of waiver itself.
"So if somebody says it's filed after a year than per day the penalty used to become extremely exorbitant. 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."
As regards the proposal on the Settlement Commission, Jaitley said it will 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, Jaitley said he proposed to provide for more benches of Advance Ruling to deal with transfer pricing disputes.
Talking about the concerns expressed by members over tax forgone, Jaitley said it is permitted by law and eventually it benefits consumers and make domestic products price competitive.
"Ours is not high tax government...Consumers want to buy goods not taxes... if you load every product with high taxes, your products will become less competitive," he said, adding that China has learnt the art of low cost productivity.
"There is no contradiction in being pro business and pro poor at the same time. When economy does well we can take care of lower strata of population which is 30 per cent," he said.
Rejecting the opposition charge that the government was giving tax relief to benefit corporate, Jaitley said it was a "misnomer" as tax concessions lead to reduction of prices and finally the consumer get the rebate.
Talking about the efforts to revive investor sentiment which had been "damaged" by retrospective amendment to the Income Tax, the Minister said, the government in principle will not bring any such legislation which will create fresh liability.
On the eve of Kargil Vijay Diwas, Jaitley said he had provided an additional Rs 5,000 crore over and above what was allocated in the interim budget of the UPA government.
Announcing the concessions in the Lok Sabha, Finance Minister Arun Jaitley said 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.
Must Read: Nation will not have to wait for long: Finance Minister on blackmoney