Amid demands for fresh tax concessions, revenue secretary Tarun Bajaj emphatically argues on the need to expand the base before rates are lowered and points to how the average payout by the non-salaried is particularly low. Excerpts from an interview with Sidhartha & Surojit Gupta

You have left the tax rates and slabs unchanged. What is the rationale behind this?
› Nearly 96% of the non-salaried assesses file returns of less than Rs 10 lakh (a year), and 88% file under Rs 5lakh. Of all the returns filed, 75% of the returns are for less than Rs 5 lakh and 92% of the returns are less than Rs 10 lakh. On an average, the non-salaried pays Rs 31,500 per return, and the salaried pay a little over Rs90,000. The relief will go to the rich people. We are trying to broaden the tax base through TDS and by pursuing the information we get. Once we see that people are paying, it will be easier to provide further relief. We have two regimes now.

In the case of the corporate sector, more people are moving to the new regime with nearly 65% opting for it during FY2019-20, which should have risen further. We need to understand what is happening in the new regime because the changes will happen in the new regime. Otherwise, I will only perpetuate the old regime and kill the new regime. When we look at it from the government’s point of view, balancing competing demands — whether this is the right time to offer relief to a small category of taxpayers or make available funds for schemes and CAPEX so that it results in faster growth is crucial. We will have to wait for a year or two for this.

Given the demands for concessions, was the option discussed?
› Everyone wants higher exemptions. We want people to move from the mindset of exemptions to paying taxes at a lower rate if they have taxable income.

What happened to the plan for a new tax law?
› We need to make the tax laws a little simpler and for that, I have asked the chartered accountant community to help me. We need a new law but whenever you decide on these things some people will gain and some will lose.

What’s the thinking on tax on cryptocurrency with many seeing it as legitimizing it?
› It is for other agencies to decide whether it is legal or not, the revenue department’s limited point is that you pay tax. The government has not used the income tax department to convey a message. We have gone ahead with a proposal to bring certainty on how to tax the product to avoid any confusion in future.

Does this dilute the fight against black money?
› If someone is using black money, we will catch them. In fact, the TDS will help us get information and track the transactions.

You have had record GST collection last month and monthly numbers hovering above Rs 1.25 lakh crore a month. Do you need a fresh set of reforms to enhance collections?
› There is a lot of seasonality, but we are not in that old mold of celebrating when we reach the Rs1 lakh crore mark. But we need to undertake further reforms such as exemptions, inverted duty structure, and change of slabs. Once the committee looking into it submits its recommendations the GST Council will decide. States are quite sensitive to the issue.

How is the tax department gearing up to meet new challenges?
› We will learn about crypto but we are well equipped to deal with other challenges. For instance, we are now getting information from banks, mutual funds, and other sources and we are analyzing data and pinpointing specific data. If you look at recent searches, they were very specific. We are tallying GST and income tax data and analyzing all that.