Finance Minister Arun Jaitley Monday said example needs to be set to create a deterrent ag the inst use of anonymous people to hide ill-gotten wealth, amid some politicians and their family members coming under the scanner for alleged benami deals.
Referring to opposition of PAN-Aadhaar linkage, he said it is an "effective anti-evasion measure" and will get rid of multiple PAN cards and mismatch in income and expenditure, but it is being opposed "in the name of privacy".
He also said that the government is using technology to reduce the interface between a tax department official and the taxpayer to not just cut compliance cost but also corruption and harassment.
Addressing tax officers at the Income Tax Day event here, he said that tax rates have to become more reasonable but for that to happen, the tax base has to be widened by including more people in the net.
"These days we are finding political leaders also resorted to (benami dealings)," he said, without naming anyone. "Therefore (we are) unearthing them."
He said the government has taken steps under the stringent Benami Transactions (Prohibition) Amendment Act, 2016 that provides for confiscating properties of those who use name of other people to convert unaccounted wealth into white.
"Unless we can set some examples, we set down right deterrent against such kind of practices" can this practice of benami properties end, he said.
Raids were conducted in recent weeks at various places including Delhi and Haryana over alleged Rs 1,000 crore benami land deals involving the RJD chief and his family.
Jaitley said that the situation where the compliant tax payer has to actually pay twice over -- once his own share of taxes and the second time a higher share to compensate the non-compliant, cannot be allowed.
"Our vision is: we will use technology, we will ensure that our procedure is simple, we will ensure that there is almost negligent interface between (tax) department and assessee, (and) we would like our rates to become even more reasonable, but to enable us to that we need to expand our base," he said.
People should voluntarily made disclosures and come within the tax net, he said.
India, on the one hand, boasts of being the fastest growing major economy in the world but on the other hand lacks in some of the essential expenditure, he said.
"A more empowered country will need to be a country which is empowered by honest and compliant taxpayers. The faster we can do it, the greater it will be in the larger interest of the country," he said.
On the anti-evasion measures taken by the government, Jaitley said linking of taxpayer's permanent account number (PAN) with biometric identifier Aadhaar is aimed at preventing tax evasion using multiple PANs.
Also, a watch is being kept on the nature of expenditure and if it is compliant with the declared income of assessee.
"You will find non compliances being defended these days in the name of privacy," he said in an apparent reference to debate over linking of Aadhaar with PAN and making it mandatory for filing of tax returns.
He said India needs to snap out of this and debate on compliance and creating a more ethical and a more complaint country.
"The net effect of demonetisation (of higher denomination currency notes), Benami Law is that they have created an incentive in favour of honest man and intended to give sleepless night to non-compliant and the dishonest," he said.
Stating that the traditional normal cannot be allowed to continue, he said, "non-compliance itself had evolved as a SOP (Standard Operating Practice)."
Jaitley said that at times pressures are built using democratic polity in order to assert a non-existent right of not to pay taxes.
"And if, those in administration and governance on matters of policies start blinking, then you will never be able to take decisions in larger national interest," he said adding the larger public opinion today is why should anybody be exempted.
For those arguing that the processes are very difficult, the procedures very complicated and that there are several consequences, he said these are all alibis for asserting the non-existent right of not to pay taxes.
"Because at the end of the day, these taxes are in larger national interest," he said asking if the country can compromise on its defence preparedness.
Also, some extra resource needs to be put in rural India, into slums, healthcare and national security.
"That is why the series of steps which we have taken are all intended to expand the base, make our processes more reasonable, make our rates more reasonable, and enrich and empower the country so that it is able to discharge its responsibility in areas where we are still found lagging," he said.
Also, technology has reduced the interface between tax officer and assessee. "This will cut down on compliance cost, cut down corruption and harassment and therefore, incentivise the honest taxpayer sitting at home will have the benefit of filing returns and getting Assessment Order."
"Unless we can create this environment within the country that it is really the performance of a national duty, almost a patriotic duty to pay taxes" that the arguments being discovered or manufactured for not paying taxes be killed, he said.