The government appears determined to widening its tax net by making the rich pay more and by targeting some grey areas of the tax economy.
The Economic Survey released on Friday proposed to widen the tax net from 5.5 per cent of earning individuals to more than 20 per cent.
Laying out the fiscal capacity roadmap for the 21st Century, the Economic Survey pointed out that nearly 85 per cent of the economy remains outside the tax net.
The Survey said just 5.5 per cent of earning individuals are in the tax net, translating to a ratio of about 4 per cent of tax payers to voters, and this ratio should be raised to a desirable estimate of about 23 per cent.
It aims to achieve this by not raising the exemption thresholds. As the average pay levels are expected to go up after the implementation of the Seventh Pay Commission award, it was expected that individual tax slabs will change too.
