Union Budget 2013: Tighter tax net to curb black money

NEW DELHI: Black money was a grey area in finance minister P Chidambaram’s budget speech.
Chidambaram neither mentioned black money nor did he speak on the study the government-sponsored think-tanks had carried out to estimate the extent of illicit wealth created in the country. But he did announce certain administrative measures that would help curb the generation of black money like expand the scope of annual information returns, extend e-payment facility through more banks and make e-filing mandatory for more categories of assessees.
He said transactions in immovable properties are usually undervalued and underreported and that half of all such transactions do not carry the PAN of the parties concerned. “With a view to improve the reporting of such transactions and the taxation of capital gains, I propose to apply TDS at the rate of 1% on the value of the transfer of immovable property where the consideration exceeds Rs 50 lakh,” he said. Agricultural land has been exempted from this.
To plug loopholes in tax avoidance — such as unlisted companies avoiding dividend distribution tax by arrangements involving buyback of shares — the FM proposed to levy a final withholding tax at the rate of 20% on profits distributed by unlisted companies to shareholders through buyback of shares. He also proposed to increase the rate of tax on payments by way of royalty and fees for technical services to non-residents from 10% to 25%. However, the applicable rate will be the rate of tax stipulated in the Double Taxation Avoidance Agreement (DTAA).
Union Budget 2013
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