Tax Defaulters Beware!

With tax recovery to the tune of more than Rs 1 lakh crore (Rs 1 trillion) held up for lack of information about the whereabouts of defaulters, the Income Tax department is working on plans to publish their names in newspapers.

The problem has been further compounded with several of the tax defaulters having created 'benami' assets to escape the dragnet.

The I-T department is embarking on this 'out of box solution' of bringing the names of tax defaulters in public domain in a bid to expose them.

The department, according to the official proposal, will publish in newspapers the names of those defaulting assessees who are either not traceable or whose assets are not identifiable.

According to the latest data of the I-T department, out of a total outstanding arrear demand of Rs 2,29,032 crore (Rs 2,290.32 billion) till March 2010, an amount of Rs 9,476 crore (Rs 94.76 billion) is unrealized or held up as the assessee is 'not traceable' while Rs 92,360 crore (Rs 923.6 billion) is stuck as there are 'no assets'.

Important deliberations, including this issue, discussed during the conference are subsequently taken forward and implemented as policy issues by the I-T department.
"The proposal will be implemented after weighing all the pros and cons about the scheme and studying the prevalent practises in other tax systems about such issues across the world," a senior I-T officer said.

The department is also planning to give wide publicity to its scheme of tapping and encouraging 'informants' to unearth tax evasion and gain tip-off on the whereabouts of absconders who have evaded huge taxes.

Source: http://www.rediff.com/business
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Manage your income tax refunds in a month!

E-filing, which was formally launched on October 13, 2006, is mandatory for companies but remains optional for individuals. There is an incentive for taxpayers who file their income-tax returns electronically - they will get their refunds within a month.

To speed up refunds and encourage electronic filing of tax returns, the Central Board of Direct Taxes has promised expeditious refunds.

The wait for refunds in the case of physical tax returns ranges between 5-10 months. "We want tax-payers to file electronically as that helps in faster processing of refunds," Sudhir Chandra, chairman, Central Board of Direct Taxes, told reporters.

As on December 31, 2010, there were about 40 lakh refund cases pending with the tax department. Last year, a Comptroller and Auditor General report had highlighted that it takes as much as 10 months for a taxpayer to get his refund.

Reports of widespread corruption and frauds in issue of refunds have also spurred a revamp of the refund system.

"The whole idea is that small taxpayers should not face any hardship in his interface with the department," Chandra added. Though the e-filing of tax returns is rising in absolute terms every year, its level has stagnated at about a quarter of the total returns filed.

The verification of the paper tax returns filed is a tedious process that also delays tax refunds. This has become a bigger issue with the rising refunds. In 2010-11, the government had refund extra tax of Rs 78,000 crore.

"E-filing ensures that tax payers' information on income, taxes and refunds are uploaded in the tax system instantly and tax computations are processed on a real-time basis," said Vikas Vasal, executive director, KPMG.

The income-tax department has been trying to make refund process faster and efficient through the use of technology interface.

"A refund banker scheme is already in place in the whole of country to ensure that taxpayers get refunds well in time," said an income-tax department official.

Chandra says the strategy to have a tax-payer friendly system has paid off as they have managed to collect the higher revised collection target of Rs 4.46 lakh crore in 2010-11.

Source: http://economictimes.indiatimes.com
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India – A tax haven?

Infrastructure investment and social sector programmes have so far been the interests of the two UPA Governments to increase spending.

This is entirely understandable, given the glaring deficiencies in both areas; but from the perspective of fiscal rectitude, there is the affordability question to be considered.

If things go to plan, the reduction of the ratio proposed by the Finance Commission for 2014-15 will be achieved next year -- three years ahead of target. But the task of fiscal correction has barely begun.

Sources reveal that the revenue foregone last year on account of tax concessions and incentives was Rs 79,554 crore (Rs 795.54 billion) on corporate income tax -- mainly accelerated depreciation, software technology parks, etc. --  and on personal income tax a further Rs 36,186 crore (Rs 361.86 billion) -- mostly long-term savings.

Excise concessions cost Rs 170,765 crore (Rs 1,707.65 billion), while customs concessions had the biggest bill: Rs 2,02,240 crore (Rs 2,022.40 billion).
The total bill -- Rs 4.89 lakh crore (Rs 4.89 trillion) -- was nearly 80 per cent of the tax collection in 2009-10!

The peak income tax, for both companies and individuals, could then be no more than 22%. That would make India a tax haven and there would be much less incentive to take money out of the country; if the incentives work, tax revenue would actually climb as people report incomes more honestly.

Sources also reveal the second transition waiting to be achieved is on the subsidy front. The central subsidy bill, mostly on food, oil-related products and fertiliser, is slated to be Rs 1,43,570 crore (Rs 1,435.70 billion) next year.

The Economic Survey cites research, which suggests that between 40% and 55 % of foodgrain meant for the poor is pilfered.

Taking the budgets for all these, every one of about 50 million families that are below the poverty line could be given Rs 3,000 every month as a cash transfer -- better than what NREG offers, and enough to bring all of them above the poverty line, at no extra cost to the government.

India could be transformed into a tax haven, and a land without absolute poverty. Both dreams can become reality if managed and with the help of our Finance Minister considering the growth of the poor and the disabled.

Source: http://www.rediff.com/business

Good News for Honest Tax payers!

Good news awaits thousands of taxpayers in the country. The Income Tax department is mulling a proposal for providing them small refunds of below Rs 1 crore (Rs 10 million) within a month's time.

Delay in receiving income tax refunds has been a major complaint of taxpayers and the department is hoping to address the issue on a priority basis. According to Income Tax officials, the proposal pertains to small tax refunds of an amount below Rs 1 crore.

I-T department officials are working for the benefit of honest taxpayers and give them the respect they deserve. They will be very firm with tax evaders without being harsh. We will make sure that a honest taxpayer is respected and will also try to create maximum trust for honest taxpayers.

The Income Tax department is in the process of issuing more than 40 lakh refund cases before April this year. The department has streamlined the refunds process as the statutory time limit to process the return and issue refund in the financial year 2009-10 is March 31 and almost 49 lakh such cases involving crores of rupees are pending with the department, a senior I-T officer said.

The Income Tax department is also in the process of establishing three more I-T returns and refunds processing centers at Manesar (Gurgaon), Pune and Kolkata on the lines of the existing centre at Bangalore. To fasten the refunds through banks, the Refund Banker Scheme has been made operational in the entire country with the help of the State Bank of India by the department.

Source :Rediff business