Government has proposed certain legislative and administrative changes with a view to reduce litigation in direct taxes. Announcing this in his maiden Budget Speech in the Parliament today, the Union Finance Minister Shri Arun Jaitley said that resident tax payers can now obtain an advance ruling in respect of their income tax liability above a defined threshold. He has also proposed to strengthen the authority for advance rulings by constituting additional benches. The scope of the Income Tax Settlement Commission shall be enlarged so that taxpayers may approach the Commission for settlement of disputes.
The Finance Minister noted that tax demand of more than Rs.4 lakh crore is under dispute and is one of the serious concerns of taxpayers. Shri Jaitley proposed to set-up a high level committee to interact with trade and industry on a regular basis and ascertain areas where clarity in tax laws is required. He has also proposed certain changes in the transfer pricing regulations.
The Finance Minister hoped that these measures would go a long way in improving confidence of taxpayers in the tax system and would provide certainty and clarity in tax laws.