PC Mody, chairman of Central Board of Direct Taxes (CBDT) is of the view that every person would benefit in the new tax regime.

Share Market Live

NSE

"However, for an individual taxpayer who is not having a business income definitely have an option of choosing between the old scheme or new scheme and every year, he can shift from one regime to other, but a person with business income, once he has exercised the option then the switchover may not be possible” he added.

Employees would have to declare their intent and choice at start of the year and employers will have to seek tax regime option from the employees, " said Mody in an interview with CNBC-TV18.

Talking about tax on foreign travel, Mody said, “These are instances where we have seen out of experience that people who have been undertaking foreign travel or remitting money abroad, their return profile does not match with the remittances being made. So it’s essentially a deduction of tax at source so far as these additional streams are concerned. It’s not that its tax paid. It is just a TDS for which a person will get the credit at the end of the year from his overall tax liability but at the same time information should be available as to who has availed of this benefits or these journey outside the country or remitting money outside.”

“Our experience suggests that in lot of cases where remittances have been made, the return profile of that particular remitter does not match with the quantum of remittance being made. It is basically to have some sort of a co-relation between the two that this provision has been introduced and it’s not that that a tax paid by him on income, which has already been subject to tax. It’s just a question of having a trail for that,” added Mody.

On dividend distribution tax front, he said, “When dividend distribution tax (DDT) was introduced the primary reason for introduction was that in the earlier era tracking the recipients of the dividend was a bit difficult, it involved a lot of paperwork and particularly for smaller investors it was very difficult exercise. So we moved to one point of taxation that is at the hands of the corporate.”

“However, with the advancement of technology all that issue is gone and now the clamour has been again for classical system of taxation that is in the hands of the recipients, which is what we have got in this budget,” he mentioned.