Budget 2016: 'Culture of filing income tax returns has to be initiated'

As non-payment of tax always been a problem in the country, Altfort Capital expects government to urge rich people in the unorganised sector to pay tax in the upcoming Budget. The budget will be presented by Finance Minister on February 29.

While talking to dna, Rahul Agarwal, Managing Director of Altfort Capital, said, "While there are approximately 180 million PAN card holders in the country, only 35 million pay taxes. The government has to widen the tax net and bring rich people in the unorganised sectors within the tax net. This would have positive implications on the overall tax rates and soften the indirect taxes which hurt the entire population, especially the ones below the poverty line. Our tax paying population as a percentage of adult population is a fraction of that in developed economies. The culture of filing income tax returns has to be initiated."

Pointing towards the increase in imports, he said, "Import of cheap, low value add products from China hurts our local manufacturing. Imports from China increased by 18% last year and formed 13.5% of our total imports. I expect the government to incentivise import of technology and manufacturing equipment while discouraging import of cheap goods. This would also augur well for Make in India."

Further, he expects clarity and relaxation of Permanent Establishment conditions for offshore fund managers. "Reduction in DDT would incentivise companies to declare dividends and be positive in attracting equity investments", he added.