Direct Tax Reform in Budget 2008
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The Direct Tax Reform in Budget 2008 has been announced by the Advisor to the Union Finance Minister of India on 6th December 2007.
According to that announcement, the number of high value transactions may be increased. Through these transactions the government will reassess the income tax structure. The number of those transactions that are used to enhance the scrutiny and evasion check will also be increased.
In addition to the on going reporting system, that captures the investment and savings related transactions, the government will also enlist some consumption expenses like, high end home gadgets, foreign travel, cars and branded jeweleries into the Annual Information Report(AIR). The government intend to evaluate the data regarding those consumptions through appropriate billing of the high value consumption items.
The government will scrutinize the direct tax structure when the voluntary compliance levels of India have reached the global mark. Moreover, the direct tax collections have been increasing at a rate of over 40% for the last couple of years and, the assesses filing returns increased by 4.12 million in 2006 – 07 compared to 2003-04. The number of assesses altogether rises from 30.17 million to 31.92 million during 2006-07.
The Finance Minister Mr P.Chidambaram has reportedly told that, the tax rates and income slabs might be restructured and with the improvement of tax compliance, the whole tax structure will keepchanging.
