The tax department?s ever-watchful eyes may just become more vigilant, come next fiscal. Tax authorities are looking at two-fold measures to increase vigilance against tax evasion as well as improve tax compliance in 2008-09.
High on its agenda is to make the permanent account number (PAN) mandatory for all bank transactions. Sources said tax authorities are looking at this as a means to track all kinds of cash flows. At present, quoting the PAN is necessary for all bank deposits over Rs 50,000. Sources said this may be done away with and all bank deposits will have to be linked to PAN. While the tax department may have to grapple with a large amount of data, if the move goes through it is also hopeful of keeping a check on the volume and amount of money transacted by taxpayers.
Earlier during the year, the government had made quoting the PAN compulsory for all security market participants, including mutual fund investors. PAN is also used for other tax- and investment-related activities such as while income tax returns, sale of immovable property, etc. Additionally, the income tax department is also proposing to increase the number of sources for annual information returns (AIR). A final list will, however, take some more time, sources said. Earlier during the month, Parthasarthy Shome, advisor to the finance minister, had also hinted at increasing the number of sources for AIR.