Traders beware! More I-T scrutiny round the corner
April, 21st 2007
The trading community may soon come under greater income tax scrutiny. The finance ministry is likely to conduct income surveys based on addresses picked up from trade directories. According to official sources, the move would boost revenue collection and increase compliance.
A Central Board of Direct Taxes (CBDT) official, however, said, It is just a part of our plan to increase the number of survey operations this year and not aimed only at the trading community. CBDT sources said, with sustained pressure, voluntary compliance can become a way of life.
The revenue department has decided to increase its focus on investigative measures to raise compliance levels. It is confident that tax surveys will prove to be a very handy tool, especially with a direct tax collection target of Rs 2,67,175 crore for 2007-08.
As many as 200 surveys were carried out by the IT department even during the previous fiscal and over Rs 3,000 crore as additional income were unearthed.
Surveys form an integral part of assessment and are conducted by the tax departments investment wing and assessing officers when returns filed by individuals and companies are lower compared to their profits. They are conducted only on business premises and are different from income tax raids.
Meanwhile, the Central Board of Excise and Customs is also planning to increase surveys and audits of trading premises to boost excise duty collection. The move comes in the wake of the poor excise duty collection in 2006-07, attributed mainly to low compliance.
Pincer Attack It is a part of the plan to increase number of surveys that are not, however, aimed only at the traders Direct tax collection target for 2007-08 is Rs 2,67,175 cr The Central Board of Excise and Customs is also planning to increase surveys and audits of trading premises