Home News Reports How Budget 2018 has quietly made a major step in increasing the tax base

How Budget 2018 has quietly made a major step in increasing the tax base

In the past few years, one has seen that the Modi Government has focused on expanding the tax net. GST and Demonetisation were two major steps which have already reaped results. With Budget 2018 the Government has brought in one more rule which will take this agenda further.

Currently, as per the Income Tax Act, an entity needs to obtain a PAN only if the taxable income crosses the minimum tax threshold limit, or if its sales are expected to cross Rs 5 lacs. There are some other clauses which make certain specific bodies liable to obtain a PAN. The clauses of applicability are linked to incomes.

Now the budget has proposed to bring in another clause which links the requirement of having a PAN, with transactions other than income. It is proposed to amend Section 139A of the Income Tax Act and mandate that every entity not being an individual, will have to apply for a PAN if it enters into a financial transaction of an amount aggregating to Rs 2.5 lakh in a financial year.

- Advertisement - - Article resumes -

In simple terms, you have to obtain a PAN if you do any sort of transaction, and the total of such transactions in any financial year crosses Rs 2.5 lacs. The departure from using the word “income” and using the word “transaction” indicates how the scope has now been widened.

Thus under this clause, even loans and other non income transactions get triggered, and that entity has to obtain a PAN. Once a PAN is obtained, automatically, the tax net is widened. The budget document states that this has been done in order to use PAN as Unique Entity Number (UEN) for non-individual entities.

The clause further provides that not only such entity, but its promoters will also have to obtain a PAN. Thus managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal officer or office bearer or any person competent to act on behalf of such entities will also have to apply for a PAN.

This move will certainly help bring more entities under the cover of Income Tax Act. Once this comes into force from April 2018, one can hope that the meager tax base of merely 2% odd of India’s population, will be given a boost with the new registrations via this clause.

Share This Post With Your Friends & Fans:
We need your support to survive in the media industry. Please consider paying us for the content we produce:

To know more about these payments, please click here.


Election 2019 Live Updates

Track all the updates on one page as the results and trends trickle in

Shehla Rashid remembers 2014, says she had wanted Kejriwal as PM

Shehla Rashid loses it early on counting day, says “Felt like a Muslim when ‘mass murderer’ won in 2014”

As early trends show an NDA victory, Shehla Rashid calls him a mass murderer, says she had wanted Arvind Kejriwal as PM in 2014 and she had felt like a 'Muslim'.

Live updates: According to EC, BJP leading in 299 seats on their own, clocks victory in 2, taking their tally possibly to 301

Latest results, trends, updates, and news about 2019 Lok Sabha election counting. Find out who will form the next government.
NYT peddles Modi 2.0 as victory of India's most divisive leader

Dear New York Times, India has chosen Modi 2.0, deal with it

When India gives a thumping, unprecedented, overwhelming victory to a man who has made every single Indian feel proud of their nation and heritage, the NYT's heartburn is expected. 

IIT graduate and an IAS officer explains in detail why EVMs can’t be ‘hacked’ or ‘tampered’ with

Bhavesh Mishra, IAS 2015 batch, B.Tech IIT Delhi, on Quora gave a detailed explanation regarding why EVMs cannot be 'hacked' or 'tampered' with.
Rana Ayyub had a meltdown seeing BJP securing an unprecedented victory

Unprecedented Modi victory triggers meltdown for controversial journalist Rana Ayyub

Prospect of a stunning Narendra Modi victory in 2019 Lok Sabha election triggered a mental collapse for controversial journalist Rana Ayyub
Reactions of Liberals after NDA appearing to secure majority

‘Liberals’ have a meltdown as result day trends indicate a massive victory for PM Modi

Trends indicate that Prime Minister Narendra Modi will once again take an oath for the post of Prime Minister. This has not gone down well with the Liberal intelligentsia and they are losing their cool over this prospect

Barkha Dutt expresses deep anguish over the fact that the mainstream media can no longer influence elections

Barkha said it doesn't make her happy that mainstream media cannot influence the voters to vote in a particular way anymore.
PM Modi slammed Mayawati for not defending the people of UP and Bihar against TMC government's accusations

23rd May 2019: When the future of Bengal politics was changed forever

Whatever the ultimate result may be, one thing is for certain, going into the 2021 Assembly Elections in the state, for the first time in history, West Bengal will have a party of saffron hue as the primary opposition.

AAP’s Sanjay Singh wants Arnab Goswami to either go to a mental asylum, be jailed or drowned

AAP's Sanjay Singh was reacting to a clip by Arnab where he was mocking the Opposition for their EVM drama

Kanhaiya Kumar’s family uses LPG stove to prepare for his victory, contrary to his claims just a few weeks ago

Kanhaiya had claimed that his mother cooked on a Chullah and not on an LPG stove as it was not viable because of being too expensive and also exhausted within 3-4 days.
Subscribe to Day's Top Stories

Latest articles

Connect with us

164,481FansLike
141,961FollowersFollow
64,375SubscribersSubscribe
Share This Post With Your Friends & Fans: