File Photo: Union Finance Minister Arun Jaitley. (Press Trust of India)
Finance Minister Arun Jaitley today asked taxmen to squeeze parallel economy in a fair manner, without being harsh, and assured that the honest taxpayers have nothing to fear about the new black money law.
"The parallel economy has to be squeezed...and (it) has to be done in very fair manner, not in a harsh manner. In doing so, as senior officers you have to ... maintain the highest standard of integrity," he said while addressing a conference of top officials of the Central Board of Direct Taxes (CBDT).
The government, the minister said, has taken a host of measures to curb the menace of black money.
These include passage of the black money law by Parliament and introduction of Benami Transactions (Prohibition) bill to deal with unaccounted domestic wealth.
He further said that improvement in tax collection will increase the ability of the government to step up spending on social and infrastructure projects and provide relief to individual taxpayers.
For the current financial year, the minister said, direct tax collection was likely to improve by 14-15 per cent and there was possibility of government improving upon the fiscal deficit target of 3.9 per cent.
However, he added that the government would prefer to increase expenditure on social sector schemes instead of improving its fiscal deficit target.
On the new black money law which seeks to bring back the illicit funds stashed abroad, Mr Jaitley said, "no honest taxpayer has anything to fear. It's targeted only against those who have stashed assets abroad."
"Black money has to be squeezed", he said, adding only those who have defied the system in the past and intend to defy the compliance window to come clean have to worry.
Government, Jaitley said, has already taken various initiatives on the taxation front which include roll out of the Goods and Services Tax (GST), reduction of corporate tax rate from 30 per cent to 25 per cent over the next four years and removal of exemptions to the extent possible.
As regards the indirect taxes, the Minister said, "The process of introduction of GST is on. A lot of work has been done, a lot of work remains to be done and we have only few months to accomplish the task."
Rajya Sabha recently referred the GST Bill to a select committee which is expected to give its report to the House at the start of the next session. The government plans to roll out the GST from April 1, 2016.
On direct tax front, Mr Jaitley said, "Our effort over the next four years will be to bring down the taxation to global levels and phase out the exemptions to the extent it is possible."
Efforts would also be made to expand the tax base and encourage non-filers to file tax returns, he said and added that individual taxpayers would continue to enjoy certain set of exemptions so that they could spend more and add to the economic growth.
Earlier, Revenue Secretary Shaktikanta Das said the Rs 7.98 lakh crore direct collection target for the current fiscal is "very much achievable and very realistic".
With regard to HSBC list on alleged black money holders abroad, he said all the assessment that had to be completed before March 31, 2015 have been completed.