India Moving Towards Tax Friendly Regime: Finance Minister Arun Jaitley

New Delhi: With an aim of improving the environment for investments, India is moving towards a tax friendly regime to correct the image which had become "bad" over the years, Finance Minister Arun Jaitley said today.

"Our tax system has to be friendly with tax payers and that is what we are trying to do step by step," he said, replying to a debate on black money in the Lok Sabha.

Advocating a tax structure which discourages evasion, he said there was a misconception that high tax rates lead to the higher revenues.

"High tax rates do not necessarily mean more revenue collection... The direct and indirect tax rates have to be brought to reasonable level so that the basket increases and there is no incentive for evasion," Mr Jaitley said.

The government, he said, should not lose out of revenues.

"Those who have to pay taxes must pay taxes. Those who do not have to pay taxes, merely by raising demands does not serve purpose as they get stuck up in courts... We cannot allow tax evasion or avoidance,"Mr Jaitley said.

He further said there was a time when India had very high tax rates and the country's growth rate was mocked at as "Hindu rate of growth".

Referring to the steps being taken by the government to unearth black money, Mr Jaitley said government has identified 427 account holders associated with the HSBC list and efforts are on to complete the tax assessment by March 31, 2015.

He also said the prosecution has already been launched in several cases, cases would be filed every week, and names would become public.

"When media comes to know it will note that there are influential people in the list (of foreign account holders)," Mr Jaitley said.