Every big transaction you make, the Income Tax Department will be watching you With Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10e from the F.Y. 2000-01 to F.Y.2019-20 (Updated Version)
HIGHLIGHTS
- CBDT says it will make greater use of technology, data analysis and AI to comb through large transactions
- The CBDT chief said scaling up information gathering will enable I-T dept to offer pre-filled returns of income
New Delhi: The
income tax department will track more high-value transactions of individuals to
ensure that these get reflected in their income tax returns, Central Board
of Direct Taxes (CBDT) chairman P.C. Mody said in an interview.
Greater use of technology, data analysis and
artificial intelligence to comb through large transactions taking place in the
market will also help in tracking people who do not file their returns despite
entering into many high-value transactions. By correlating the spending and
investments made by people with their known sources of income, the department
wants to make sure that people do not evade taxes. The emphasis on efficiency
in tax collection and on adding more taxpayers come at a time when a slowing
economy has made it harder for the tax department to achieve the 12.7% growth
in direct tax collections in FY 21 while nominal GDP growth is
expected to be only 10%.
“We are increasing our information mechanism to a
newer level and the reporting entities (third-party financial institutions) are
being increased. Once we have this information available with us along with the
data of the taxpayers, we will be in a position to compare almost on a
real-time basis as to what high-value financial transactions a tax payer is
doing and how is he filing the returns of income,” said Mody. He, however, said
it was not correct to call it surveillance. “It is totally non-intrusive and
absolutely non-adversarial. It is a subtle persuasion,” said the chairman,
adding that it was akin to telling taxpayers that the authorities are aware of
the value transactions made by them, which should get reflected in their tax returns.
At present, the department collects information about
certain high-value transactions which along with details of tax deducted and
collected at source in the case of individuals is available for viewing in the
tax department’s portal in the form 26 AS statement. The information collected
for this includes savings bank deposits, credit card bill payments and
investments in instruments like mutual funds above a specified threshold. Mody
said that scaling up information gathering will also enable the department to
offer pre-filled returns of income. “We are looking at (enhancing) tax
collections as well as offering tax payer service,” he said.
Mody also rejected fears that certain steps proposed
in the budget—introducing a monetary limit for tax-free contribution by
employers to the retirement savings of employees and taxation of
dividend in the hands of shareholders—could alienate high income earners. “For
us, every taxpayer is important. We have adopted the classical system of
taxation. Dividend is taxed in the hands of the recipient. As far as personal
income tax rate is concerned, India is comparable to other countries. So, there
is no concern of flight of persons to other countries. Besides, we are offering
more services and convenience. We are offering a taxpayer charter,” he said.
Taxation of dividend in the hands of shareholders and limiting the tax-free
contribution of employers to the retirement savings of employees had displeased
many high-income earners. The Narendra Modi administration has shown an
inclination to increase the tax on the well-off to raise resources for welfare
measures. Last year, the government increased the surcharge on income in two
slabs. Accordingly, a person earning more than Rs.5 crore annually has to pay 42.74% on the income
exceeding Rs. 5 crore.
Mody rejected criticism that increasing the number of
slabs in the proposed lower personal income tax scheme complicates the tax
structure. He said having multiple slabs suggests that the tax system is more
progressive.
Another budget proposal aimed at checking abuse of
certain tax provisions was to modify the concept of residence, which raised
fears of global income of NRIs working in countries like the UAE, where there
is no income tax liability, might be taxed in India. The finance ministry
clarified that only the India income of such people will be taxed. Mody said
that the department has to balance revenue considerations and recommendations
from stakeholders while framing budget proposals.
SOURCE From 'www.businessleague.in
No comments:
Post a Comment