The government on Monday made it clear once again that it was moving away from tax exemptions. While Finance Minister Nirmala Sitharaman said India needs to “widen its tax base”, revenue secretary Tarun Bajaj said tax breaks “only benefit the superrich”.
“We have a new income tax regime without exemptions which will never take off if we keep giving exemptions,” Bajaj said at a post-Budget 2022-23 interaction with the industry in Chennai. “We should have higher tax slabs, lower tax rates not based on tax arbitrages that we have created in too many products.”
On long-term capital gains, Bajaj said: “In 2019, 80 percent of the Rs 75,000 crore of capital gains were made by people earning Rs 50 lakh and more. Can you beat this? Please don’t ask for these exemptions. It’s embarrassing. We are already accused of inequity, the rich are becoming richer and the poor are becoming poorer.”
“We are closing our eyes and allowing tax exemptions to no-profit education institutes. Donations coupled with tax breaks will benefit only the superrich,” the revenue secretary said.
Finance secretary TV Somanathan also said: “Please tell us here where we can raise more taxes painlessly, this will help us spend more. For education, for GDP spend to be raised to 6 percent, the tax to GDP ratio will need to be doubled from the current 10-11 percent.”
Source: CNBC TV18 dated 28.02.2022
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