Old cases of angel tax may be permitted under new Vivad Se Viswas Scheme, says Revenue Secretary Malhotra

This is a new exercise as most of the issues that are there in the DTC have already been taken up in the Income Tax Act. The primary purpose of this review is to simplify the existing Act, so that it becomes easier to read, easier to understand, and make it concise at the same time. Of course, it will draw upon the work which has been done earlier but this will be done through our own internal committee. We will do a consultation at the appropriate time with various stakeholders and the effort will be to make it concise. There are large number of provisions spread over number of chapters. Then there are a large number of provisos. Effort would be made to present a simple and concise Act. Also, as mentioned in the Budget speech, besides making it concise, effort would be to make it lucid, easy to read and understand. This will reduce disputes and litigation, thereby providing tax certainty to the tax payers. It will also bring down the demand embroiled in litigation.

The speech mentioned that it is proposed to be completed in six months. This means we may see the new Bill in the next Budget.

We have always maintained that there should be lesser number of rates. A group of Ministers is working on recommendations on rate restructuring, based on these, GST Council will discuss and deliberate upon them. We also have always said that taxes should be lower, and the effort would continue.

Post the introduction of GST, tax rates on various products have come down. The same approach may be applied for petrol and diesel also. However, it is up to the GST Council which will take a final call on rates, timing etc.

 Under existing mechanism, the base price for calculation of LTCG is the price paid to the seller. This does not include interest paid by the buyer, if he or she takes loan to purchase the property. There is no change in this provision which means only the price paid to seller will be taken for calculation of LTCG under the new mechanism.

Payment of Stamp Duty will also not be included in the base price for calculation of capital gain. This is the same position as mentioned in the existing system.

There will be no new cases registered. However, cases registered in the past will be processed according to the law of that time. Also, the budget has proposed introduction of a Direct Tax Vivad se Vishwas Scheme, 2024 with the objective of providing a mechanism of settlement of disputed issues, thereby reducing litigation without much cost to the exchequer. Old cases related to angel tax may be resolved through this new scheme. The government will notify the new scheme with the date of implementation along with the last date for the scheme.

There have been cases where it is found that benamidar or any person other than beneficial owner is not dishonest. They can be poor and innocent employee of the beneficiary or even illiterate. So, imposing on them the same penalty as the beneficial owner of such a benami transaction could be disproportionate in nature. Alternatively, if such benamidars were to become approvers, it would help in gathering clinching evidence and details about benami properties and result in convictions of the beneficial owners, thus strengthening the regime. With the amendment, now a benamidar or any person other than the beneficial owner can get immunity from penalty and prosecution if they turn approver against the beneficial owner. This will result in more convictions and more assets getting caught under the Benami Law.