(a) whether it is a fact that more people would be brought
into the tax bracket by reducing exempted category of individuals
and moderate level of tax rates;
(b) whether it is also a fact that the role played by the
Settlement Commission in ariving fair and just settlement
of income-tax disputes has resulted in realisation of
substantial revenue; and
(c) if so, to what extent the direct tax collection has
increased during the last fiscal year particularly
the corporate tax?
MINISTER OF STATE IN THE MINISTRY OF FINANCE (SH. GINCEE N. RAMACHANDRAN)
(a) The Income-tax Act does not specify any category of
individuals who are exempted from tax. However, certain
types of income are exempt from tax. Reducing the number
of such exempted types of incomes could result in more
people coming into the tax bracket and also increase
the tax collection. Further, moderate level of tax rates
tend to increase the level of voluntary compliance by
encouraging people to pay taxes. This is evidenced by
substantial increase in the number of taxpayers and the
higher level of tax collection in the last three years.
(b) The revenue realised through the machinery of Settlement
Commission does not make much of impact on the overall
revenue collection.
(c) Although there is an overall increase of 20.11% in
direct tax collection (16.16% in the case of Corporate tax)
during the last fiscal year (2000-2001) compared to the
previous year, this increase is not attributable/related
to settlement of disputes through the Settlement Commission.