Measure upon which the assessment or determination of tax liability is based is the tax base. In the case of income tax, for instance, the tax base is determined by what the tax authorities state as the minimum amount of annual income that can be taxed (taxable income). If this minimum amount (tax threshold) is lowered, this will automatically increase (widen) the tax base; if it is raised, the tax base will be narrowed.   

Now, to increase revenue, there are two options. Either keep taxing the same people who have been paying taxes all these years, levy more taxes on these people at higher rates or widen the tax base. We hope that the CBDT will aim or direct at widening the tax base.

Regarding this, Ms. Anita Kapur, Chairperson of the CBDT asks Department to widen tax base through her letter dated 8^th May, 2015. Ms. Kapur highlights that the existing income tax payers is low compared to the potential. The gap between the potential and the actual tax payers appears to be wider in the case of tier-II cities and towns.

To widen the tax base, a concerted and focused effort in mission mode is required. Addition of at least 25lakhs new assesses per month during the current financial year shall be strived for.

The letter mentioned that ‘the assessment and investigation charges have been the mainstay of the Department’s efforts to widen tax base. I request you to come prepared to present and discuss specific strategies for widening the tax base of your own region and at national level.’

Ms. Kapur asked for the suggested strategy by 20^th May, 2015 and requested to focus attention on this issue to achieve this goal.

____________________________________________________________________________________________________________________________________