Govt to write off tax dues up to Rs 100; 21.54L to benefit

As one time measure, the government has decided to write off outstanding taxes of 21.54 lakh taxpayers who owe Rs 100 or less.

This was stated by Minister of State for Finance Santosh Kumar Gangwar in a written reply in the Lok Sabha today.

He said that with a view to reducing the administrative burden of maintaining and servicing very low amount of arrears, the government decided to write off the arrears in about 21.54 lakh cases.

"Since only a small amount of Rs 6.4 crore is to be written off under the decision of the government, no significant loss of revenue is caused requiring any arrangement or provision to be made in this regard," he said.

On the other hand, Gangwar said removal of 21.54 lakh cases (16 per cent of all cases) of low-value arrear from the records of the Income Tax Department would have a significant positive impact on the process of arrear collection and management.

"Though the decision to write off arrears up to Rs 100 has no bearing on prevention of tax evasion, the government has separately taken several steps to counter tax evasion and unearth unaccounted money...," the minister added.

In another reply, Gangwar said cases for e-verification of cash deposits made during the demonetisation period (November 9 - December 30, 2016) under 'operation clean money' have been identified by matching the database on tax profiles of persons with the quantum of deposits made by them.

As part of the "initial phase", he said the tax department has sought online response as per pre-defined parameters on source of case deposited by 17.92 lakh persons through its e-filing portal.

Meanwhile, the government said that there was no proposal "at present" to replace Income Tax with Banking Transaction Tax or BTT.

To a query if the government has any proposal to replace the Income Tax with BTT, Minister of State for Finance Santosh Kumar Gangwar said: "There is no such proposal under consideration of the government at present."

There is no tax by the name of BTT in the statute, he said in a written reply in the Lok Sabha.

He said however that earlier a Banking Cash Transaction Tax (BCTT) was being levied at the rate of 0.1 per cent on cash withdrawals from banks exceeding specified limit.

The BCTT was introduced in 2005 by the then UPA finance minister P Chidambaram. The levy was, however, withdrawn with effect from April 1, 2009.

The minister further informed that the collection of BCTT over the years has been very insignificant as compared to collection of Income Tax.

In January, however, the government had said that it will examine the recommendations of the chief ministers panel on encouraging digital payments post demonetisation for levying BCTT on cash deals of Rs 50,000 and above before taking a final view on it.

With Andhra Pradesh Chief Minister Chandrababu Naidu as convener, the panel on digitisation had submitted its interim report to Prime Minister Narendra Modi.