1. Black money: Instill fear of jail and social censure in tax evaders, says CBDT

Black money: Instill fear of jail and social censure in tax evaders, says CBDT

Taxman should instill the fear of "incarceration, loss of liberty and social opprobrium" in tax evaders and prosecute them in large numbers to create a credible deterrence against the menace of black money...

By: | New Delhi | Published: June 7, 2015 10:14 AM
Income Tax

“Tax on concealed income should remain merely incidental,” said CBDT. (PTI)

Taxman should instill the fear of “incarceration, loss of liberty and social opprobrium” in tax evaders and prosecute them in large numbers to create a credible deterrence against the menace of black money, the CBDT says.

The apex policy making body of the I-T department, in a strategy paper for a recent conference of top tax officials, told tax sleuths that the “need of the hour” is to effectively launch prosecution cases in wilful evasion cases at the earliest even “without” waiting for the outcome of any other appellate processes.

“If the endemic and rampant tax evasion is to be contained, then search/survey on a few evaders limited to bringing their concealed income to tax can never be the solution. The remedy must lie in creating credible deterrence so that potential evaders desist from crossing the red line. Deterrence cannot be built merely by levying tax on concealed income.

“Deviant assesses take minor financial hiccups in their stride and promptly return to their wayward ways. What scares them is the fear of incarceration and consequent loss of liberty and social opprobrium that it brings. It is to this fear that a search/survey action must address itself,” the Central Board of Direct Taxes (CBDT) said in its paper for financial year 2015-16.

It added that “prosecution and penalty must, therefore, be the objective of search/survey action and the principal measure of its success”.

“Tax on concealed income should remain merely incidental,” it said.

The department, tasked with combating black money cases in India and abroad, feels effective use of penalties and prosecutions are an “important limb” in creating a “credible deterrence” against the menace and its staff and officials should work in this direction, henceforth.

“It (investigation) should rather be creation of credible deterrence through successful prosecutions and penalties which would go a long way in reducing the menace of black money by improving voluntary compliance,” the strategy paper said.

The top brass of the CBDT, while framing the latest action plan, has kept in mind a CAG report of 2013 where the central auditor pointed out a number of “deficiencies” in administration of penalties and prosecutions which required immediate attention of the department which enforces tax laws in the country and collects a variety of taxes like Income Tax, Corporate Tax and Wealth Tax.

CBDT has also asked its top officers in the ranks of Principal Chief Commissioners and Chief Commissioners posted in various parts of the country to tighten up their belts and diligently monitor and coordinate prosecution matters.

“Officers fear the long-winded court proceedings in absence of due support mechanism. There is inadequate monitoring of prosecution cases pending in the courts and almost complete lack of coordination with the judicial machinery,” the board observed while issuing the new directives.

All these measures, the strategy paper said, are also required to be enforced strictly during this financial year as the government has recently asked the tax department to add at least 25 lakh new assesses every month and widen the tax base.

“The strategy to achieve this ambitious target would include creation of credible deterrence through imposition of sustainable penalties and expeditious filing of prosecution complaints in appropriate cases,” it said.

For Updates Check Economy News; follow us on Facebook and Twitter

  1. A
    Ashutosh
    Jun 7, 2015 at 5:01 pm
    Ask for TAX DIRECTLY and then Ask for VOTES - That is REAL Democracy all else is a sham
    Reply
    1. A
      Ashutosh
      Jun 7, 2015 at 5:00 pm
      Each and every citizen including the beggars on the street should pay DIRECT TAX - does not matter if it is Rs1 per year. FIRST ABOLISH ALL INDIRECT TAXES
      Reply
      1. A
        Ashutosh
        Jun 7, 2015 at 5:02 pm
        Mother of creation of BLACK MONEY is INDIRECT TAXES - which are in multiple of the business margin - and corrupt money siphoned off by politicians from the social spending from the tax kitty
        Reply
        1. A
          Ashutosh
          Jun 7, 2015 at 4:59 pm
          take anything under the sun and it is so heavily taxed breaking the bones of a common man - INDIRECT taxes are the root cause of black money - Central Excise Service Tax State Excise VAT Octroi LBT Entry Entertainment Tax etc etc are all if averaged - then one is paying almost 50 paise to Government from every rupee spent. A trader / Businesman / Industry pays multiple times of their own margin in the business. Thus raising corruption. Even a beggar is a tax payer in our country - when he buys a matchbox he has paid all of the above listed taxes on it. ABOLISH indirect taxes and see how MAKE IN INDIA happens automatically without any additional efforts. STOP business and Industry from being tax collection agents of the Government. Ask for TAX DIRECTLY as you ask for Votes during election - then it can be called a REAL democracy
          Reply
          1. A
            Ashutosh
            Jun 7, 2015 at 6:31 pm
            'I suggest a State GST of 1000% and a Central GST of 1000% for the FAST DEVELOPMENT of the nation and let us abolish INCOME TAX - all literates will agree to this - Padhe likho ne Hindusthan ko barbaad kar diya''
            Reply
            1. A
              Ashutosh
              Jun 7, 2015 at 5:04 pm
              Never heard of any public discussions on VAT / Excise duty / Service tax / Octroi / LBT / Entry Tax / Entertainment tax etc between Government and the aam aadmi / poor / illiterate / middle cl who bear the MOST of this in REAL TERMS - The affluent rich cl and Government Babu's with upar ki kamai never bother about this. Government thinks money grows on trees
              Reply
              1. A
                Ashutosh
                Jun 7, 2015 at 5:03 pm
                Taxes when collected DIRECTLY will instill a sense of responsibility and involvement of the illiterate poor backward aam aadmi - who are currently under the false notion that it is the RICH who pay taxes - Whereas all are tax payers INDIRECTLY
                Reply
                1. C
                  Chand
                  Jun 7, 2015 at 11:29 pm
                  Fully agreed.
                  Reply
                  1. C
                    Chand
                    Jun 7, 2015 at 11:25 pm
                    Hail Ashutosh... The point is well said. However, the solution does not seem practical... politicians and their promises. Can I request you to suggest something else?
                    Reply
                    1. O
                      oldtimer
                      Jun 7, 2015 at 4:30 pm
                      How about setting an example by prosecuting the tax officers who have collected crores from the tax payers? Let us see the department jail some high ranking officers .
                      Reply
                      1. T
                        t p
                        Jun 8, 2015 at 6:07 pm
                        Do not har the tax payers. reduce the rates & increase the tax base. Tax rates should start from 1 % to maxi 10 % with simplifications . For any negligency penalty should not be there but facilitation be there.
                        Reply
                        1. S
                          SC
                          Jun 7, 2015 at 7:57 pm
                          The person/officer who has drafted this news should be given the highest award of the world.
                          Reply
                          1. Load More Comments

                          Go to Top