 "R V Easwar")
Former Delhi high court judge R V Easwar, chair of the committee to simplify income tax laws, hopes the government will incorporate his panel's recommendations in the coming Budget as these require immediate attention. He tells Dilasha Seth the second report, expected only after the Budget, will focus on issues such as the general anti-avoidance rule (GAAR) and double taxation treaties, among others. Edited excerpts:
You have made some concrete recommendations to revise the tax deducted at source (TDS) thresholds and rates. What impact do you think that will have on a economy that is struggling to witness higher growth?
We did not think in terms of the economy but our recommendations are from the perspective of enhancing the ease of doing business and reducing tax litigation. We have essentially targeted pensioners and savings accounts invested in banks through the TDS recommendations. These rates and thresholds were fixed long before and need to be changed to benefit small savers and pensioners.
You have not touched the tax slabs at all...
We could not have looked at the tax slabs as we did not have a mandate for that. By our terms of reference, we had to suggest measures without substantially impacting the tax base or revenue collections. We are essentially looking at providing transparency and predictability in the tax regime, beside cutting tax litigation.
Is this is the only report from the committee before the Budget?
This is a small beginning. Only 5-10 per cent of the work has been done so far. Our work will be spread over the next seven to eight months. But, yes, the next report will be out only after the Budget.
Do you expect the government to incorporate these in the coming Budget as these are the issues requiring immediate attention?
It is up to the government to incorporate these recommendations during the Budget and we hope they do. CBDT (Central Board of Direct Taxes) has also in the past few months issued administrative circulars, hiking monetary limits for appeals to cut litigation. So, we are basically working in tandem.
You have said you will look at more complex issues in your next report. What will be those areas?
The Income Tax Act has 298 sections, and each section is a complex one with several related aspects to each. We could not have dealt with Section 90 - double taxation, GAAR, and tax treaties in this report; we will do that in the second round.
