FinMin may widen scope of source-based taxation to plug revenue leakages: Report

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FinMin may widen scope of source-based taxation
Aiming to plug the revenue leakages in the system, the finance ministry may widen the scope of tax collection at source (TCS) to include transactions like real estate, foreign tours and mutual funds, besides credit card payments and luxury spends, among others, said a media report.

The move, said experts, will improve reporting mechanism for transactions, curb flow of unaccounted money and bring down cash transactions.

"In Budget 2012-13, we added new categories for payment of TCS and TDS. Some more areas might be brought under the ambit in the upcoming Budget. One per cent TCS might be levied, especially on huge cash payments, to track the money trail," said a finmin official as per the report.

TCS is the collection of tax by seller from buyer at the time of making of payments, who then deposit that with the government and buyers get credit for the tax paid on their behalf.

Experts welcomed the move saying that it would be great start to widen the tax base by bringing more sections under the tax net.

Read more about: union budget 2013
Story first published: Tuesday, February 12, 2013, 15:30 [IST]
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