Income Tax Department Drawing Up Sweeping Reforms | CNBC TV18

Income Tax department is planning some sweeping changes once the next government takes charge. My colleague Tim C Jay Puria is here with more details. Well that’s right. Sources have told CNBC TV18 that the Income Tax department has drawn up a list of priority areas which could see the light in the upcoming post election budget. Sources say these priorities include firstly measures to prevent taxpayers erosion via tax deductible payments to low tax nations. This will be subject to various treaties. Remember tax base erosion arising via tax deductible payments like data hosting charges, cloud computing charges? And given the increasingly globalized and interconnected world, the tax department feels that there is a need of a strong source rule to prevent taxpayers. Also, when it comes to the next priority list, it could be that the government can consider simplifying and rationalization of capital gains tax structure in a way that uniform treatment is given to each asset class. Remember, the proposal has been under discussion for long but no clarity has emerged as yet. Could be that the upcoming budget might set the tone to begin this exercise. Thirdly, addressing the problem of rising outward remittances measures can be announced to improve compliance. To curb this next proposal is to have measures to revamp law and penalties. To correct the existing law with an aim that measures are not leading to harsh punishments. And lastly, measures to manage litigation which help in preventing disputes, probably changes in the law that prefer mediation, compromise and settlements. Just to clarify here, all these proposals on streamlining focus areas are still on the drawing board and no final decision has been taken as yet. Let us see what the full budget finally unveils back to you, Right. Thank you, Timothy for that. That’s a wrap on this edition of Business 360. News and updates continue on the other side. Stay tuned to CNBC, TVTV.