To increase the tax revenue, the Institute of Chartered Accountants of India has suggested that the Centre widen the tax base by covering all businesses including small scale manufacturing and job workers.
Other businesses like tailors, small restaurants, home delivery outlets, auto spare servicing, software ancillary units and other small businesses, whose sales turnover or gross receipts were less than Rs 40 lakh could also be brought under it, ICAI in its pre-budgetment memorandum to the Centre said.
To promote India as favourable ‘holding company’ destination, a mechanism known as the allowance of underlying tax credit for the stream of dividend income should be adopted, it suggested.
Under the scheme, credit was given by the country where the parent company was a resident, not only for the tax withheld at source on the dividend payout by the overseas subsidiary, but also in respect of the tax suffered on distributable profits, ICAI, said.
To check tax avoidance, the government department concerned could provide information regarding Government tenders where the value exceeded Rs 10 lakh.
Information, regarding sales and purchases of shares exceeding Rs 5 crore in the case of day traders, can be filed by the concerned brokers themselves who were dealing with them.
Receipt of donations by trusts or institutions exceeding Rs 1 lakh, may be filed by themselves, ICAI suggested.
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