Weeks before Budget, Arun Jaitley lists out benefit of low tax rates

India's peak tax rate, including surcharges, is 35% but effective rate is 23% due to many exemptions

Finance Minister Arun Jaitley, at the National Academy of Customs Excise and Narcotics, said that India economy needs a broader base for which we need a lower level of taxation.

India's peak tax rate, including surcharges, is as much as 35% but the effective rate is only around 23% due to multiple exemptions. The introduction of the goods and services tax (GST) is also expected to bring down effective indirect taxes, The Economic Times reported.

"There are no grey areas in taxation laws. It's either white or black. Either a tax is payable or a tax is not payable. And therefore to discover grey areas in fiscal laws is not possible," Jaitley said. 

"That's the same principle that applies to the criminal law also. Either an offence has been committed or not committed. You interpret the law as it is without adding or subtracting a word, that's the primary function of the tax person," he added.