FULL INTERVIEWS
Revenue Secretary A B PANDEY tells Indivjal Dhasmana that most people took exemption up to ~1 lakh in 2018-19. They will gain if they switch to the new tax regime, he says. Edited excerpts: “IF WE FIND MORE PEOPLE SWITCHING TO THE NEW TAX REGIME, WE WILL
Won’t options given to taxpayers who earn up to ~15 lakh a year to choose between two tax regimes make things complicated for them?
The new regime is simple. One has to see the exemptions one was taking earlier and compare the new tax rates without those exemptions. Income-tax returns will give him the two options, so that the taxpayer can decide.
Will it lead to a lower tax regime in the coming years?
We have to see how many people have found it beneficial. If we find more people switching to the new tax regime, we will take a call on lowering tax rates at an appropriate time.
But many analyses found the new tax regime will not be beneficial for people claiming exemption. Your take?
Only 5 million people of the 57 million who filed returns in 2018-19 claimed exemptions of more than ~2 lakh. This means less than 10 per cent taxpayers fall in this category. Analyses in the media concentrated on this category. According to our internal analysis, most people take tax exemption up to ~1 lakh. If they decide to choose the new tax regime, they will gain.
This new provision would lead to loss of business for insurance companies. Don’t you think so?
It is individuals who decide whether a particular scheme is beneficial for them or not. I am sure these companies will come up with innovative products to increase sales. No company should be entirely dependent on tax incentives. That is not an efficient way of conducting business in the long run. The product itself should be attractive enough to
woo buyers.
When the economy is likely to grow 7.5 per cent at current prices, tax buoyancy taken was 0.5 per cent, but when the economy is assumed to grow 10 per cent, the buoyancy taken is 1.2 per cent. Why is it so?
You have to see the impact of corporation tax rate cuts as well. Buoyancy will be 1.4 per cent this year if you include the revenues foregone because of these cuts. As such, 1.2 per cent is entirely feasible.