INCOMETAXINDIA

IT department´s stock and flow problem

Lakhs of tax payers receive notices from the Income tax dept. regarding their expenses or investments being disproportionate to their taxable income for the same year – implying that the expenses or investments are from unaccounted sources. Most cases have simple explanations – the income was declared in a previous year or it is exempt income – facts already available in the tax dept database. Yet lakhs of tax payers have to duel with the tax authorities to prove their credentials. Most people emerge victorious after a long and arduous ordeal costing time and money. The tax department resources are used up in dealing with the honest tax payers & the tax evaders may escape. Harsh’s article in Business Standard on why the tax departments Data Analysis Package can cross tally more information and thus have more pointed search results more likely to net tax evaders while being bothersome for fewer honest tax payers.

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How to make tax officials accountable

Individual Tax payers have become more vocal as compliance by them has improved significantly and aggregate taxes paid by individuals has overtaken taxes paid by corporates. With that the demands for the tax department to be held accountable have also increased. Unfair treatment such as indefinite delays by the tax department or very low interest paid by them on delayed refunds are no longer acceptable. Harsh’s article in the Business Standard on how accountability can be infused in the Income Tax department using the model of Public Service Guarantee Act enacted by almost all state governments. comments welcome.

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Prevent NRIs’ PAN from being declared inactive

PANs not linked to Aadhar will be deactivated from April 1, 2022 leading to suspension of operations in the bank accounts, securities/MF accounts linked to such PANs. The tax department has not clarified how they will distinguish PANs of NRIs/OCIs or other persons who may not be eligible to apply for Aadhar and keep such PANs active. The tax department has not provided any facility for NRIs/OCIs to keep their PANs activated by marking themselves as ineligible for Aadhar. Deactivation of PANs will lead to serious consequences for affected individuals and the Income Tax department owes it to them not to wait till the last minute and to come out with a solution well in time. Harsh Roongta’s article in Business Standard today where he outlines that these are not the only tax travails faced by NRIs/OCIs.

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