Capital gains tax rationalisation was industry's demand, says Revenue Secy

Revenue secretary Sanjay Malhotra Friday defended the government’s decision to rationalise the capital gains tax regime saying that the industry itself had demanded rationalisation of rates. He added that the budget has a lot to offer to the industry in terms of tax reforms and simplification.In his post budget interaction organised by industry bodies, he said that the budget has focused on the taxpayers, simplification and investment friendly approach. He added that capital gains rate rejig was not carried out with revenue augmentation objective.

“…while you are asking for simplification,… then let’s also be prepared that some things will go up and some things will go down. But simplification has its own virtues…,” Malhotra said, adding that there is a revenue increase but very marginal. He asked the business whether the industry is ready to stick with multiple tax slabs for different asset classes. “This question, I put to you …. Should the tax on these two asset classes or any other asset class be different?” Malhotra said, citing industry body CII’s own pre-budget memorandum suggesting two rates for long-term capital gains. “Our approach has always been and will continue to be collaborative, not confrontational. Our goal is to collect taxes efficiently while maintaining respect and trust from taxpayers,” he added. The revenue secretary highlighted that the budget has a great deal to offer to the Industry including abolition of angel tax, decriminalization of laws, and reductions in customs duties and foreign investors.

Industry leaders called the budget goal oriented and inclusive and requested the revenue secretary to bring a dispute settlement scheme for customs on the lines of Vivad Se Vishwas scheme.