Mountain Of Online Data To Help Finmin Take Call On Demand For Tax Sops From Industry Bodies This Budget
INDIA Incs pre-Budget tax pitch has got to be drastically re-written this time. Finance minister P Chidambaram has sure got the jugular, with the mandatory e-filing of income-tax returns for corporates.
For the first time, the finance ministry will be able to tell which tax break has bled the government and which industry has not delivered on its tax support. One click of the mouse and a flood of data will be available on each of the 3.5-4 lakh companies that file income-tax returns online.
As Mr Chidambaram settles down to work out his Budget arithmetic later this month, he will have detailed data to craft his tax proposals. There would be no need to play the guessing game on the numbers as he will have an exact knowledge of what is coming from where. In fact, it will not be unfair to say this could be the biggest paradigm shift for the income-tax department in the past couple of decades forcing the industry to be transparent with its demands on the tax front.
This could also mean that Parliament and the masses could justifiably demand to see the numbers on whether the tax breaks or shelters are cost-effective for the economy.
The scope of data mining from such a bank is enormous. Consider this: The new return form has 24 pages with 600 fields for various data. For instance, besides the company-wise picture of the impact of tax exemptions & deductions made, there would be the current equity structure, detailed profit and loss figures and more. E-filing has been made compulsory for companies beginning this year. The last date for filing returns is November 30. E-filing is optional for individuals and non-corporates.
With the new system in place, the quantum of exemptions and its exact cost to the government and benefit to the corporate sector can be easily figured out. Ministry officials, therefore, expect to be armed with substantial data when the pre-Budget consultations with the industry begin.
While informal consultations at the official level are already under way, they would gather steam from the next week. This could be bad news for companies that had been taking shelter under vague generalities, such as an industry being in its infancy and supposed losses that it would suffer if tax rates were not moderated.