Informist, Friday, Nov 25, 2022
By Priyasmita Dutta and Sagar Sen
NEW DELHI – There is a need to reform the structure of taxation on capital gains and the government will look at rationalising norms on the asset holding period and indexation, Department of Revenue Secretary Tarun Bajaj said.
"This is one area that is left out in terms of reforms in the taxation structure... it's pretty complicated," Bajaj said in an interview to Informist.
There need not be any relief or a tax rate change, but the structure of capital gains needs to be simplified, said Bajaj, who is due to superannuate on Wednesday.
India's tax rate for long-term capital gains on equities is lower than many other countries, and so there should not be a demand for concession on this account, Bajaj had said earlier.
Capital gains are profits arising from transfer of capital assets, including shares and property.
Reports said the government is looking at rationalising the long-term capital gains tax structure by bringing parity in rates and holding period for similar asset classes.
The Union Budget for 2022-23 (Apr-Mar) had capped the surcharge on long-term capital gains on transfer of any type of assets at 15% from up to 37% earlier.
Bajaj said there was a "crying need to do something" on the personal income tax front.
The last time the government had tinkered with income tax rates was in the Budget for 2020-21, in which it introduced an option for people to pay lower rates of income tax, but without any deductions and exemptions.
On tax collections, Bajaj said, the government expects direct tax buoyancy of 1.3-1.4 in the next financial year starting April on account of the continued economic momentum. Tax buoyancy is the ratio at which the tax kitty grows in relation to GDP growth. For instance, buoyancy of 1.3 means if nominal GDP grows at 10%, tax will grow 13%.
"On the GDP front, you may be at same level at which you were in before COVID-19, but on revenues we have really grown much further," he said. "Revenues have looked up much more than the GDP."
Bajaj said the government had not expected direct tax collections to grow 25-30% this year on top of a 50% growth last year.
Direct tax collections have grown 23.2% on year to 7.35 trln rupees in Apr-Sep on top of a 49.1% growth in 2021-22.
Going forward, tax buoyancy will not be as much as it was in the last few years, given that the reforms in formalisation of the economy, compliances, and technology have already come into play, Bajaj said. "Some of the low-hanging fruits have already been harvested. There is a limit to the impact of reforms."
On goods and services taxes, Bajaj said, the government has not tinkered with the rates so there should be reasonable buoyancy in the mop-up.
India's total GST collections have grown 29.7% to 10.45 trln rupees in Apr-Oct.
Going forward, GST collections will not record as much growth in percentage terms because of a high base effect, Bajaj said. "Now, base effect will come into play. Additionally, compliances have limitations, so it should grow along with GDP now," he said. "It cannot grow at the same pace as it has been growing in the last two years."
The Budget had projected total tax collections in 2022-23 at 27.58 trln rupees, up 1.8% from a year ago. Now, with tax collections growing at 17.6% in Apr-Sep, the actual mop-up could be 2.0-3.5 trln rupees more than the Budget estimate.
The higher-than-budgeted revenue mop-up will help offset the government's expenditure-side pressures caused mainly on account of higher subsidies on food and fertilisers.
Bajaj said the government is yet to assess the additional revenues on account of the tax on windfall gains on petroleum and its products. "It will not contribute too much," he said.
The government had, in July, announced tax on windfall profits made by domestic crude oil producers and fuel exporters due to high global prices of oil and fuels. End
Edited by Ranjana Chauhan
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2022. All rights reserved.
Informist, Friday, Nov 25, 2022
By Priyasmita Dutta and Sagar Sen
NEW DELHI – There is a need to reform the structure of taxation on capital gains and the government will look at rationalising norms on the asset holding period and indexation, Department of Revenue Secretary Tarun Bajaj said.
"This is one area that is left out in terms of reforms in the taxation structure... it's pretty complicated," Bajaj said in an interview to Informist.
There need not be any relief or a tax rate change, but the structure of capital gains needs to be simplified, said Bajaj, who is due to superannuate on Wednesday.
India's tax rate for long-term capital gains on equities is lower than many other countries, and so there should not be a demand for concession on this account, Bajaj had said earlier.
Capital gains are profits arising from transfer of capital assets, including shares and property.
Reports said the government is looking at rationalising the long-term capital gains tax structure by bringing parity in rates and holding period for similar asset classes.
The Union Budget for 2022-23 (Apr-Mar) had capped the surcharge on long-term capital gains on transfer of any type of assets at 15% from up to 37% earlier.
Bajaj said there was a "crying need to do something" on the personal income tax front.
The last time the government had tinkered with income tax rates was in the Budget for 2020-21, in which it introduced an option for people to pay lower rates of income tax, but without any deductions and exemptions.
On tax collections, Bajaj said, the government expects direct tax buoyancy of 1.3-1.4 in the next financial year starting April on account of the continued economic momentum. Tax buoyancy is the ratio at which the tax kitty grows in relation to GDP growth. For instance, buoyancy of 1.3 means if nominal GDP grows at 10%, tax will grow 13%.
"On the GDP front, you may be at same level at which you were in before COVID-19, but on revenues we have really grown much further," he said. "Revenues have looked up much more than the GDP."
Bajaj said the government had not expected direct tax collections to grow 25-30% this year on top of a 50% growth last year.
Direct tax collections have grown 23.2% on year to 7.35 trln rupees in Apr-Sep on top of a 49.1% growth in 2021-22.
Going forward, tax buoyancy will not be as much as it was in the last few years, given that the reforms in formalisation of the economy, compliances, and technology have already come into play, Bajaj said. "Some of the low-hanging fruits have already been harvested. There is a limit to the impact of reforms."
On goods and services taxes, Bajaj said, the government has not tinkered with the rates so there should be reasonable buoyancy in the mop-up.
India's total GST collections have grown 29.7% to 10.45 trln rupees in Apr-Oct.
Going forward, GST collections will not record as much growth in percentage terms because of a high base effect, Bajaj said. "Now, base effect will come into play. Additionally, compliances have limitations, so it should grow along with GDP now," he said. "It cannot grow at the same pace as it has been growing in the last two years."
The Budget had projected total tax collections in 2022-23 at 27.58 trln rupees, up 1.8% from a year ago. Now, with tax collections growing at 17.6% in Apr-Sep, the actual mop-up could be 2.0-3.5 trln rupees more than the Budget estimate.
The higher-than-budgeted revenue mop-up will help offset the government's expenditure-side pressures caused mainly on account of higher subsidies on food and fertilisers.
Bajaj said the government is yet to assess the additional revenues on account of the tax on windfall gains on petroleum and its products. "It will not contribute too much," he said.
The government had, in July, announced tax on windfall profits made by domestic crude oil producers and fuel exporters due to high global prices of oil and fuels. End
Edited by Ranjana Chauhan
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2022. All rights reserved.
Informist, Friday, Nov 25, 2022
By Priyasmita Dutta and Sagar Sen
NEW DELHI – There is a need to reform the structure of taxation on capital gains and the government will look at rationalising norms on the asset holding period and indexation, Department of Revenue Secretary Tarun Bajaj said.
"This is one area that is left out in terms of reforms in the taxation structure... it's pretty complicated," Bajaj said in an interview to Informist.
There need not be any relief or a tax rate change, but the structure of capital gains needs to be simplified, said Bajaj, who is due to superannuate on Wednesday.
India's tax rate for long-term capital gains on equities is lower than many other countries, and so there should not be a demand for concession on this account, Bajaj had said earlier.
Capital gains are profits arising from transfer of capital assets, including shares and property.
Reports said the government is looking at rationalising the long-term capital gains tax structure by bringing parity in rates and holding period for similar asset classes.
The Union Budget for 2022-23 (Apr-Mar) had capped the surcharge on long-term capital gains on transfer of any type of assets at 15% from up to 37% earlier.
Bajaj said there was a "crying need to do something" on the personal income tax front.
The last time the government had tinkered with income tax rates was in the Budget for 2020-21, in which it introduced an option for people to pay lower rates of income tax, but without any deductions and exemptions.
On tax collections, Bajaj said, the government expects direct tax buoyancy of 1.3-1.4 in the next financial year starting April on account of the continued economic momentum. Tax buoyancy is the ratio at which the tax kitty grows in relation to GDP growth. For instance, buoyancy of 1.3 means if nominal GDP grows at 10%, tax will grow 13%.
"On the GDP front, you may be at same level at which you were in before COVID-19, but on revenues we have really grown much further," he said. "Revenues have looked up much more than the GDP."
Bajaj said the government had not expected direct tax collections to grow 25-30% this year on top of a 50% growth last year.
Direct tax collections have grown 23.2% on year to 7.35 trln rupees in Apr-Sep on top of a 49.1% growth in 2021-22.
Going forward, tax buoyancy will not be as much as it was in the last few years, given that the reforms in formalisation of the economy, compliances, and technology have already come into play, Bajaj said. "Some of the low-hanging fruits have already been harvested. There is a limit to the impact of reforms."
On goods and services taxes, Bajaj said, the government has not tinkered with the rates so there should be reasonable buoyancy in the mop-up.
India's total GST collections have grown 29.7% to 10.45 trln rupees in Apr-Oct.
Going forward, GST collections will not record as much growth in percentage terms because of a high base effect, Bajaj said. "Now, base effect will come into play. Additionally, compliances have limitations, so it should grow along with GDP now," he said. "It cannot grow at the same pace as it has been growing in the last two years."
The Budget had projected total tax collections in 2022-23 at 27.58 trln rupees, up 1.8% from a year ago. Now, with tax collections growing at 17.6% in Apr-Sep, the actual mop-up could be 2.0-3.5 trln rupees more than the Budget estimate.
The higher-than-budgeted revenue mop-up will help offset the government's expenditure-side pressures caused mainly on account of higher subsidies on food and fertilisers.
Bajaj said the government is yet to assess the additional revenues on account of the tax on windfall gains on petroleum and its products. "It will not contribute too much," he said.
The government had, in July, announced tax on windfall profits made by domestic crude oil producers and fuel exporters due to high global prices of oil and fuels. End
Edited by Ranjana Chauhan
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2022. All rights reserved.
Informist, Friday, Nov 25, 2022
By Priyasmita Dutta and Sagar Sen
NEW DELHI – There is a need to reform the structure of taxation on capital gains and the government will look at rationalising norms on the asset holding period and indexation, Department of Revenue Secretary Tarun Bajaj said.
"This is one area that is left out in terms of reforms in the taxation structure... it's pretty complicated," Bajaj said in an interview to Informist.
There need not be any relief or a tax rate change, but the structure of capital gains needs to be simplified, said Bajaj, who is due to superannuate on Wednesday.
India's tax rate for long-term capital gains on equities is lower than many other countries, and so there should not be a demand for concession on this account, Bajaj had said earlier.
Capital gains are profits arising from transfer of capital assets, including shares and property.
Reports said the government is looking at rationalising the long-term capital gains tax structure by bringing parity in rates and holding period for similar asset classes.
The Union Budget for 2022-23 (Apr-Mar) had capped the surcharge on long-term capital gains on transfer of any type of assets at 15% from up to 37% earlier.
Bajaj said there was a "crying need to do something" on the personal income tax front.
The last time the government had tinkered with income tax rates was in the Budget for 2020-21, in which it introduced an option for people to pay lower rates of income tax, but without any deductions and exemptions.
On tax collections, Bajaj said, the government expects direct tax buoyancy of 1.3-1.4 in the next financial year starting April on account of the continued economic momentum. Tax buoyancy is the ratio at which the tax kitty grows in relation to GDP growth. For instance, buoyancy of 1.3 means if nominal GDP grows at 10%, tax will grow 13%.
"On the GDP front, you may be at same level at which you were in before COVID-19, but on revenues we have really grown much further," he said. "Revenues have looked up much more than the GDP."
Bajaj said the government had not expected direct tax collections to grow 25-30% this year on top of a 50% growth last year.
Direct tax collections have grown 23.2% on year to 7.35 trln rupees in Apr-Sep on top of a 49.1% growth in 2021-22.
Going forward, tax buoyancy will not be as much as it was in the last few years, given that the reforms in formalisation of the economy, compliances, and technology have already come into play, Bajaj said. "Some of the low-hanging fruits have already been harvested. There is a limit to the impact of reforms."
On goods and services taxes, Bajaj said, the government has not tinkered with the rates so there should be reasonable buoyancy in the mop-up.
India's total GST collections have grown 29.7% to 10.45 trln rupees in Apr-Oct.
Going forward, GST collections will not record as much growth in percentage terms because of a high base effect, Bajaj said. "Now, base effect will come into play. Additionally, compliances have limitations, so it should grow along with GDP now," he said. "It cannot grow at the same pace as it has been growing in the last two years."
The Budget had projected total tax collections in 2022-23 at 27.58 trln rupees, up 1.8% from a year ago. Now, with tax collections growing at 17.6% in Apr-Sep, the actual mop-up could be 2.0-3.5 trln rupees more than the Budget estimate.
The higher-than-budgeted revenue mop-up will help offset the government's expenditure-side pressures caused mainly on account of higher subsidies on food and fertilisers.
Bajaj said the government is yet to assess the additional revenues on account of the tax on windfall gains on petroleum and its products. "It will not contribute too much," he said.
The government had, in July, announced tax on windfall profits made by domestic crude oil producers and fuel exporters due to high global prices of oil and fuels. End
Edited by Ranjana Chauhan
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2022. All rights reserved.
Informist, Friday, Nov 25, 2022
By Priyasmita Dutta and Sagar Sen
NEW DELHI – There is a need to reform the structure of taxation on capital gains and the government will look at rationalisating norms on the asset holding period and indexation, Department of Revenue Secretary Tarun Bajaj said.
"This is one area that is left out in terms of reforms in the taxation structure... it's pretty complicated," Bajaj said in an interview to Informist.
There need not be any relief or a tax rate change, but the structure of capital gains needs to be simplified, said Bajaj, who is due to superannuate on Wednesday.
India's tax rate for long-term capital gains on equities is lower than many other countries, and so there should not be a demand for concession on this account, Bajaj had said earlier.
Capital gains are profits arising from transfer of capital assets, including shares and property.
Reports said the government is looking at rationalising the long-term capital gains tax structure by bringing parity in rates and holding period for similar asset classes.
The Union Budget for 2022-23 (Apr-Mar) had capped the surcharge on long-term capital gains on transfer of any type of assets at 15% from up to 37% earlier.
Bajaj said there was a "crying need to do something" on the personal income tax front.
The last time the government had tinkered with income tax rates was in the Budget for 2020-21, in which it introduced an option for people to pay lower rates of income tax, but without any deductions and exemptions.
On tax collections, Bajaj said, the government expects direct tax buoyancy of 1.3-1.4 in the next financial year starting April on account of the continued economic momentum. Tax buoyancy is the ratio at which the tax kitty grows in relation to GDP growth. For instance, buoyancy of 1.3 means if nominal GDP grows at 10%, tax will grow 13%.
"On the GDP front, you may be at same level at which you were in before COVID-19, but on revenues we have really grown much further," he said. "Revenues have looked up much more than the GDP."
Bajaj said the government had not expected direct tax collections to grow 25-30% this year on top of a 50% growth last year.
Direct tax collections have grown 23.2% on year to 7.35 trln rupees in Apr-Sep on top of a 49.1% growth in 2021-22.
Going forward, tax buoyancy will not be as much as it was in the last few years, given that the reforms in formalisation of the economy, compliances, and technology have already come into play, Bajaj said. "Some of the low-hanging fruits have already been harvested. There is a limit to the impact of reforms."
On goods and services taxes, Bajaj said, the government has not tinkered with the rates so there should be reasonable buoyancy in the mop-up.
India's total GST collections have grown 29.7% to 10.45 trln rupees in Apr-Oct.
Going forward, GST collections will not record as much growth in percentage terms because of a high base effect, Bajaj said. "Now, base effect will come into play. Additionally, compliances have limitations, so it should grow along with GDP now," he said. "It cannot grow at the same pace as it has been growing in the last two years."
The Budget had projected total tax collections in 2022-23 at 27.58 trln rupees, up 1.8% from a year ago. Now, with tax collections growing at 17.6% in Apr-Sep, the actual mop-up could be 2.0-3.5 trln rupees more than the Budget estimate.
The higher-than-budgeted revenue mop-up will help offset the government's expenditure-side pressures caused mainly on account of higher subsidies on food and fertilisers.
Bajaj said the government is yet to assess the additional revenues on account of the tax on windfall gains on petroleum and its products. "It will not contribute too much," he said.
The government had, in July, announced tax on windfall profits made by domestic crude oil producers and fuel exporters due to high global prices of oil and fuels. End
Edited by Ranjana Chauhan
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2022. All rights reserved.
Informist, Friday, Nov 25, 2022
By Priyasmita Dutta and Sagar Sen
NEW DELHI – There is a need to reform the structure of taxation on capital gains and the government will look at rationalising norms on the asset holding period and indexation, Department of Revenue Secretary Tarun Bajaj said.
"This is one area that is left out in terms of reforms in the taxation structure... it's pretty complicated," Bajaj said in an interview to Informist.
There need not be any relief or a tax rate change, but the structure of capital gains needs to be simplified, said Bajaj, who is due to superannuate on Wednesday.
India's tax rate for long-term capital gains on equities is lower than many other countries, and so there should not be a demand for concession on this account, Bajaj had said earlier.
Capital gains are profits arising from transfer of capital assets, including shares and property.
Reports said the government is looking at rationalising the long-term capital gains tax structure by bringing parity in rates and holding period for similar asset classes.
The Union Budget for 2022-23 (Apr-Mar) had capped the surcharge on long-term capital gains on transfer of any type of assets at 15% from up to 37% earlier.
Bajaj said there was a "crying need to do something" on the personal income tax front.
The last time the government had tinkered with income tax rates was in the Budget for 2020-21, in which it introduced an option for people to pay lower rates of income tax, but without any deductions and exemptions.
On tax collections, Bajaj said, the government expects direct tax buoyancy of 1.3-1.4 in the next financial year starting April on account of the continued economic momentum. Tax buoyancy is the ratio at which the tax kitty grows in relation to GDP growth. For instance, buoyancy of 1.3 means if nominal GDP grows at 10%, tax will grow 13%.
"On the GDP front, you may be at same level at which you were in before COVID-19, but on revenues we have really grown much further," he said. "Revenues have looked up much more than the GDP."
Bajaj said the government had not expected direct tax collections to grow 25-30% this year on top of a 50% growth last year.
Direct tax collections have grown 23.2% on year to 7.35 trln rupees in Apr-Sep on top of a 49.1% growth in 2021-22.
Going forward, tax buoyancy will not be as much as it was in the last few years, given that the reforms in formalisation of the economy, compliances, and technology have already come into play, Bajaj said. "Some of the low-hanging fruits have already been harvested. There is a limit to the impact of reforms."
On goods and services taxes, Bajaj said, the government has not tinkered with the rates so there should be reasonable buoyancy in the mop-up.
India's total GST collections have grown 29.7% to 10.45 trln rupees in Apr-Oct.
Going forward, GST collections will not record as much growth in percentage terms because of a high base effect, Bajaj said. "Now, base effect will come into play. Additionally, compliances have limitations, so it should grow along with GDP now," he said. "It cannot grow at the same pace as it has been growing in the last two years."
The Budget had projected total tax collections in 2022-23 at 27.58 trln rupees, up 1.8% from a year ago. Now, with tax collections growing at 17.6% in Apr-Sep, the actual mop-up could be 2.0-3.5 trln rupees more than the Budget estimate.
The higher-than-budgeted revenue mop-up will help offset the government's expenditure-side pressures caused mainly on account of higher subsidies on food and fertilisers.
Bajaj said the government is yet to assess the additional revenues on account of the tax on windfall gains on petroleum and its products. "It will not contribute too much," he said.
The government had, in July, announced tax on windfall profits made by domestic crude oil producers and fuel exporters due to high global prices of oil and fuels. End
Edited by Ranjana Chauhan
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2022. All rights reserved.
Informist, Friday, Nov 25, 2022
By Priyasmita Dutta and Sagar Sen
NEW DELHI – There is a need to reform the structure of taxation on capital gains and the government will look at rationalising norms on the asset holding period and indexation, Department of Revenue Secretary Tarun Bajaj said.
"This is one area that is left out in terms of reforms in the taxation structure... it's pretty complicated," Bajaj said in an interview to Informist.
There need not be any relief or a tax rate change, but the structure of capital gains needs to be simplified, said Bajaj, who is due to superannuate on Wednesday.
India's tax rate for long-term capital gains on equities is lower than many other countries, and so there should not be a demand for concession on this account, Bajaj had said earlier.
Capital gains are profits arising from transfer of capital assets, including shares and property.
Reports said the government is looking at rationalising the long-term capital gains tax structure by bringing parity in rates and holding period for similar asset classes.
The Union Budget for 2022-23 (Apr-Mar) had capped the surcharge on long-term capital gains on transfer of any type of assets at 15% from up to 37% earlier.
Bajaj said there was a "crying need to do something" on the personal income tax front.
The last time the government had tinkered with income tax rates was in the Budget for 2020-21, in which it introduced an option for people to pay lower rates of income tax, but without any deductions and exemptions.
On tax collections, Bajaj said, the government expects direct tax buoyancy of 1.3-1.4 in the next financial year starting April on account of the continued economic momentum. Tax buoyancy is the ratio at which the tax kitty grows in relation to GDP growth. For instance, buoyancy of 1.3 means if nominal GDP grows at 10%, tax will grow 13%.
"On the GDP front, you may be at same level at which you were in before COVID-19, but on revenues we have really grown much further," he said. "Revenues have looked up much more than the GDP."
Bajaj said the government had not expected direct tax collections to grow 25-30% this year on top of a 50% growth last year.
Direct tax collections have grown 23.2% on year to 7.35 trln rupees in Apr-Sep on top of a 49.1% growth in 2021-22.
Going forward, tax buoyancy will not be as much as it was in the last few years, given that the reforms in formalisation of the economy, compliances, and technology have already come into play, Bajaj said. "Some of the low-hanging fruits have already been harvested. There is a limit to the impact of reforms."
On goods and services taxes, Bajaj said, the government has not tinkered with the rates so there should be reasonable buoyancy in the mop-up.
India's total GST collections have grown 29.7% to 10.45 trln rupees in Apr-Oct.
Going forward, GST collections will not record as much growth in percentage terms because of a high base effect, Bajaj said. "Now, base effect will come into play. Additionally, compliances have limitations, so it should grow along with GDP now," he said. "It cannot grow at the same pace as it has been growing in the last two years."
The Budget had projected total tax collections in 2022-23 at 27.58 trln rupees, up 1.8% from a year ago. Now, with tax collections growing at 17.6% in Apr-Sep, the actual mop-up could be 2.0-3.5 trln rupees more than the Budget estimate.
The higher-than-budgeted revenue mop-up will help offset the government's expenditure-side pressures caused mainly on account of higher subsidies on food and fertilisers.
Bajaj said the government is yet to assess the additional revenues on account of the tax on windfall gains on petroleum and its products. "It will not contribute too much," he said.
The government had, in July, announced tax on windfall profits made by domestic crude oil producers and fuel exporters due to high global prices of oil and fuels. End
Edited by Ranjana Chauhan
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2022. All rights reserved.
Informist, Friday, Nov 25, 2022
By Priyasmita Dutta and Sagar Sen
NEW DELHI – There is a need to reform the structure of taxation on capital gains and the government will look at rationalisating norms on the asset holding period and indexation, Department of Revenue Secretary Tarun Bajaj said.
"This is one area that is left out in terms of reforms in the taxation structure... it's pretty complicated," Bajaj said in an interview to Informist.
There need not be any relief or a tax rate change, but the structure of capital gains needs to be simplified, said Bajaj, who is due to superannuate on Wednesday.
India's tax rate for long-term capital gains on equities is lower than many other countries, and so there should not be a demand for concession on this account, Bajaj had said earlier.
Capital gains are profits arising from transfer of capital assets, including shares and property.
Reports said the government is looking at rationalising the long-term capital gains tax structure by bringing parity in rates and holding period for similar asset classes.
The Union Budget for 2022-23 (Apr-Mar) had capped the surcharge on long-term capital gains on transfer of any type of assets at 15% from up to 37% earlier.
Bajaj said there was a "crying need to do something" on the personal income tax front.
The last time the government had tinkered with income tax rates was in the Budget for 2020-21, in which it introduced an option for people to pay lower rates of income tax, but without any deductions and exemptions.
On tax collections, Bajaj said, the government expects direct tax buoyancy of 1.3-1.4 in the next financial year starting April on account of the continued economic momentum. Tax buoyancy is the ratio at which the tax kitty grows in relation to GDP growth. For instance, buoyancy of 1.3 means if nominal GDP grows at 10%, tax will grow 13%.
"On the GDP front, you may be at same level at which you were in before COVID-19, but on revenues we have really grown much further," he said. "Revenues have looked up much more than the GDP."
Bajaj said the government had not expected direct tax collections to grow 25-30% this year on top of a 50% growth last year.
Direct tax collections have grown 23.2% on year to 7.35 trln rupees in Apr-Sep on top of a 49.1% growth in 2021-22.
Going forward, tax buoyancy will not be as much as it was in the last few years, given that the reforms in formalisation of the economy, compliances, and technology have already come into play, Bajaj said. "Some of the low-hanging fruits have already been harvested. There is a limit to the impact of reforms."
On goods and services taxes, Bajaj said, the government has not tinkered with the rates so there should be reasonable buoyancy in the mop-up.
India's total GST collections have grown 29.7% to 10.45 trln rupees in Apr-Oct.
Going forward, GST collections will not record as much growth in percentage terms because of a high base effect, Bajaj said. "Now, base effect will come into play. Additionally, compliances have limitations, so it should grow along with GDP now," he said. "It cannot grow at the same pace as it has been growing in the last two years."
The Budget had projected total tax collections in 2022-23 at 27.58 trln rupees, up 1.8% from a year ago. Now, with tax collections growing at 17.6% in Apr-Sep, the actual mop-up could be 2.0-3.5 trln rupees more than the Budget estimate.
The higher-than-budgeted revenue mop-up will help offset the government's expenditure-side pressures caused mainly on account of higher subsidies on food and fertilisers.
Bajaj said the government is yet to assess the additional revenues on account of the tax on windfall gains on petroleum and its products. "It will not contribute too much," he said.
The government had, in July, announced tax on windfall profits made by domestic crude oil producers and fuel exporters due to high global prices of oil and fuels. End
Edited by Ranjana Chauhan
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