Bolstered tax data to improve revenue collection, says CBDT chief Pramod Chandra Mody

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February 5, 2020 4:45 AM

Explaining the proposed ‘taxpayer charter’ proposed in the Budget, Mody said that it would provide statutory recognition to administrative framework and hence would be enforceable.

Mody said that the revised estimates for direct tax collection were realistic, adding he felt pretty confident of meeting the target based on the information flows from third party as well as reporting entities. Mody said that the revised estimates for direct tax collection were realistic, adding he felt pretty confident of meeting the target based on the information flows from third party as well as reporting entities.

The amount of information and data being gathered by the income tax department would serve the dual purpose of improving revenue collections through better compliance as well as preparing pre-filled return forms starting from assessment year 2020-2021, Central Board of Direct Taxes (CBDT) chairman Pramod Chandra Mody told FE on Tuesday.

“Getting pre-filled forms ready is our aim, and we are progressing very fast on that. We have information coming from reporting entities including our indirect tax counterpart, which would help the taxpayers to judge for themselves whether their high-value transactions have actually been factored into their returns of income or not. That very information can also be used for pre-filling the returns also,” Mody said. He said the department was scaling up the extent of pre-filled information after it was rolled out for salaried taxpayers earlier.

Mody said that the revised estimates for direct tax collection were realistic, adding he felt pretty confident of meeting the target based on the information flows from third party as well as reporting entities. He said data flow would start reflecting in the current fiscal itself and help department meet the personal income tax target which is pegged to grow at 18% over the collections last year. However, the collections in the April-December period have been muted, recording a growth of just over 5%.

The Budget launched a dispute resolution-cum-amnesty scheme for 4.83 lakh direct tax cases, which could apply to cases related to disproportionate cash deposit during demonetisation if they are already in dispute. However, Mody said it wasn’t possible to estimate the exact number of cases to come under the scheme. “What the scheme says is that whatever is in dispute at appellate level is covered under the scheme. Incidentally, in all those cases (demonetsiation), the assessment have been finalised, and if a taxpayer isn’t happy about assessment then he would go for an appeal. And such cases are covered under the scheme.”

He added that scheme was a reasonable offer made by the department to taxpayers as it only the original tax demand would be collected while interest and penalty would be waived off. Additionally, there would not be prosecution. “Everything gets settled and if interest and penalty is what is in dispute, then a taxpayer has to pay 25% of that amount. Offer is till March 31, but taxpayers who come forward to avail the scheme thereafter then the assessee would have to pay 10% extra on the original tax demand. And if its a penalty and interest case, then instead of 25% , those who come after March 31 would pay 30%.”

Reacting to the criticism that the new personal income tax regime would benefit to only a small section of taxpayers, he said that taxpayers in the lower income bracket would benefit from the regime, especially those who have just entered the work force and are still not used to deductions and exemptions. “I do foresee that more and more people would opt for the new regime because whenever you make investment for tax purposes, you have to keep an account of that which can be cumbersome for many,” Mody added.

Explaining the proposed ‘taxpayer charter’ proposed in the Budget, Mody said that it would provide statutory recognition to administrative framework and hence would be enforceable. “This would empower the taxpayer more… The charter would be enforceable in the manner that a taxpayer can take the department to the court if the promises made in the charter are not delivered,” he added.

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