New Delhi, Mar 22, 2017 : Making Aadhaar number mandatory for filing of Income Tax returns is necessary to curb tax evasion and frauds, the government said today while rejecting the opposition demand for a relook at the move.
Finance Minister Arun Jaitley replied in the affirmative when a BJD member questioned in the Lok Sabha whether the government was "forcing" the people to have Aadhaar number by making it mandatory.
He, however, ruled out imposing any tax on agriculture income, saying it is a state matter.
He was replying to a debate on the Finance Bill 2017, which was later passed by the House along with 40 official amendments, including the one on reducing the cap on cash transactions from Rs 3 lakh to Rs 2 lakh from April 1.
Just before the bill was passed, BJD members staged a walkout over the Aadhaar issue while Congress members walked out as the government gave no commitment to waive farm loans.
The amendments also included the merger of tribunals of different ministries and a proposal for launching electoral bonds.
Jaitley said the cap on cash transactions is being reduced to curb generation of black money and the move to introduce electoral bonds is for cleansing the political funding.
"To encourage digital economy and to discourage cash economy, I had proposed in Budget that there will be a ban on cash transactions of over Rs 3 lakh. I am making it Rs 2 lakh by an amendment," he said.
On cleansing of political funding, he asked the political parties to give "advice", saying the government will consider all the suggestions while drafting the final policy on this.
To make electoral funding clean and transparent, the Budget had proposed that funding should be in the form of digital or cheque and cash donations be limited to Rs 2,000. Also a electoral bond will be part of the scheme.
"I want to urge (Mallikarjun) Kharge, it is not about any specific party. We want a big party like Congress and all other parties to give a suggestion in a formal way, then we will consider them while formulating the electoral bond scheme, because the issue cuts across the political lines. So to clean the system, suggestions will be necessary," he said.
As parties like BJD opposed the move to make Aadhaar mandatory for filing of Income Tax returns and making PAN application, Jaitley said linking of Aadhaar with PAN was necessary as people have multiple PAN cards and are using it as a tool for tax evasion.
"Aadhaar has biometric details, so its chances of misuse become minimal. When the country has so much technology, and when it is being put to use, then why create such a hue and cry about it? It is an anti-evasion measure which will benefit the country. So the government considers it right to implement it," he said.
Jaitley said the UIDAI had been conceptualised by the previous UPA dispensation and the NDA government is putting it to use with 98 per cent adults or more than 108 crore people in India having been issued Aadhaar number.
"We have kept a provision that a person who does not have Aadhaar can say I have applied for Aadhaar. We can’t allow people to say I will not make Aadhaar, but through multiple PAN cards will continue to evade taxes," he said.
Bhartruhari Mahtab (BJD) said the Supreme Court had said in September last year that Aadhaar is not mandatory and wanted to know whether the government was "forcing" people to have it.
"Yes, we are," he said, adding, "If the technology, which has a network of 108 crore people and all tax-paying households have it, and they give it along with their ITR, then the scope for fraud and tax evasion comes down."
With regard to taxation of agriculture income, Jaitley said "Centre does not have the power to impose tax on agriculture. It is outside the legislative competence of Parliament... It is a state subject... There is no tax on agriculture and it won’t be levied."
During the discussion on the finance bill, Mahtab had raised the issue of imposition of tax on agriculture income.
Jaitley said the government will achieve the tax collection target of a "record" Rs 17 lakh crore as provided in the Revised Estimate.
Hoping that Goods and Services Tax (GST) will be introduced from July 1, Jaitley said a consensus has been arrived at between the Centre and states on most of the contentious issues in the GST Council meeting.
"The government will bring before Parliament four GST legislations and there will be a fifth legislation as the Excise and Customs Acts will have to be amended. We will bring these legislations together to Parliament in the next few days," he said.
The GST Council has already cleared five legislations-- CGST, IGST, UTGST, GST Compensation Law and the SGST. The Union Cabinet earlier this week cleared the Central GST (CGST), Integrated GST (IGST), Union Territory GST (UTGST) and the Compensation law.