The income tax department will seek to eliminate the hassle of paying taxes and reduce the cost of compliance
significantly while making sure its handling of large cases of tax evasion will send a strong signal of deterrence, said Anita Kapur, chairperson of the Central Board of Direct Taxes (CBDT).
“Tax evasion spoils the compliance culture because people start believing the system is unfair,” said Kapur, while making a strong case for launching prosecution in the few instances of large scale tax evasion identified after extensive intelligence gathering.
Kapur also clarified that selection of cases for scrutiny is purely automated and based on several parameters and that individual assessing officers have no discretion in taking up cases for scrutiny at their free will.
The department will also make sure that as far as possible, salaried persons need not have to visit tax offices, she said. To make tax administration more friendly to assessees, it has already instructed officers to limit their enquiries only to the aspect on which they have received information from third party sources which do not agree with what has been reported by a tax payer.
The tax authority is also building an “intelligent” database to profile tax payers for policy making purposes.
Refuting charges that the government is holding up tax refunds, Kapur said that the figures under this category in the first two months of the current fiscal stood at Rs 39,147 crore against similar figures of Rs 32,366 crore in the same period of the last financial year.
Kapur also said that a high-level committee, set up by the Central Board of Direct Taxes (CBDT) to scrutinise all cases arising out of the retrospective tax amendment, has received less than 10 applications so far. The committee was set up last year as announced by finance minister Arun Jaitley in his Budget speech for 2014-15.
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