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Taxman cometh, and his byte is deadlier
India Budget March 1 : At The Click Of A Button: Every Transaction You Make,They’ll Be Watching You
TEAM TOI
The taxman has finally married cuttingedge technology. He will now be able to instantly track every transaction made — be it buying a house, a piece of art or plain withdrawal of cash from the bank. All this at the click of a button.
The benefits, the FM has promised, will also percolate down to the common man. Once the system is networked by June this year, taxpayers will be able to file returns from any of the 510 offices. At present, even though the I-T department offers an efiling option, taxpayers are also required to file physical returns.
From a corporate perspective, introduction of a risk management system and Electronic Data Interchange (EDI) in the Customs Department will reduce the time to clear cargo. E-payments of customs and excise duties will also be possible.
To make all of this possible, the tax collection departments will start using Business Process Re-engineering (BPR) tools. This will mean a rethink of all existing procedures to eliminate duplication of work wherever possible. Not just that, all of the departments will be networked.
This will translate into all of the 745 income tax offices in 510 cities — and the 550 customs and central excise offices in 245 cities — being networked to create national databases. The deadline set for both departments to be fully computerised networks is end-2006. The networking will encompass creation of national data centres, data warehousing facilities and disaster recovery sites too.
No flash in the PAN: The base will grow
The 10-digit Permanent Account Number (PAN) is all set to become a lifeline for the taxman in nabbing defaulters and potential taxpayers. FM plans to make it mandatory for individuals to quote their PAN on specific transactions. These transactions will be notified on 1 June, 2006.
Of course, this wasn’t before the finance ministry discovered that individuals had not even bothered to quote their PAN number. A scrutiny of the annual information returns (AIR) covering seven different entities showed that almost 60% of the highvalue transactions did not quote PAN.
That prompted the FM to announce in his Budget speech that he would take the power to direct persons to apply for PAN in certain cases. Currently, quoting of PAN is mandatory for all fixed deposits in banks above Rs 50,000 and all cash withdrawals of same amount. By all accounts, the FM plans to expand the scope of the AIRs, so that the I-T department is able to track more transactions.
At present, PAN is allotted to 4.26 crore taxpayers. The I-T department has already set a target to increase PAN allotments by 20% this year. The decision to make PAN mandatory now comes at a time when the taxpayer base is seen growing at 20% every year. At this rate, the country’s taxpayer base would nearly double in four years.
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| Source: Economic Times |
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