CBDT plans to reduce the need for taxpayers to interact with officials with the use of technology
August, 29th 2016
A kind, gentler tax department — that's what Rani Singh Nair has in mind. "The challenge of the tax department is that it has to collect taxes but with a smile," said the new head of the Central Board of Direct Taxes (CBDT).
Even Prime Minister Narendra Modi recently referred to the consternation that strikes most Indians at the mere mention of the taxman. "Middle class, upper middle class used to be hassled with I-T officers, more than police," he said in his Independence Day speech. "I have to change this situation, I am working on it and will make the change happen." The Modi government has often cited the need to put an end to so-called tax terrorism in order to encourage investors.
Apart from getting tax officials to be less aggressive, the department is aiming to reduce the need for taxpayers to interact with officials through the use of technology. "Our attempt is to reduce footfall of a taxpayer into tax office," she said.
"We are looking at removing the touch points where the department really interacts with tax payers."
She also wants to improve department morale by ensuring that career progression isn't blocked. "Issues of infrastructure, promotions and vigilance that have been pending for long — let's close them and take quick action," she said. "There is no point to let things fester so I hope I would be able to deliver on these as well." To this end, Nair has met representatives of all associations. The National Academy of Direct Taxes has already started courses to enhance soft skills.
"The old image of a bureaucrat needs to be rewrapped and repackaged into a new image of a facilitator," Nair said.
In the last two years, the department has worked to adopt a nonadversarial tax regime through initiatives like e-fling, e-transfer of refunds, e-assessment and a My Account section where taxpayers can log in and send a query.
"Entire department is now moving towards a hands-off approach," she said. "Now 99% of tax payers do not have to interact with the department. That leaves only less than 1% that comes for scrutiny." From this year onward, the taxpayer is being told why he's been ..
"So by empowering the tax payer, by giving him information using technology, we will to a large extent help remove this fear in his mind he has to go to tax office or meet an officer," Nair said. But perceptions built over years can't be altered quickly.
"A lot has been done by the tax department," she said, pointing to the numerous clarifications that the department has issued to set taxpayers' minds at rest and remove ambiguities. "But somehow our image is not changing."
Being non-adversarial doesn't mean getting lax on collections, especially when the government faces big fiscal challenges. The more vigilant that field formations are, better the tax collections, she said, adding that the focus on third -party data has begun to pay off. "We keep getting third-party data and are now linking it with returns," she said. "We launched ESahyog last year where if we found a mismatch between the data of a taxpayer and his return, the latter is informed electronically and asked to revise return or correct the data."
This is another supposedly nonthreatening way to reach a tax payer as there's no penalty or prosecution involved. On the other hand, this also means that it's less easy to slip through the cracks. "Earlier they thought nothing happens. Now they are realising that bits of information that are coming are getting connected," she said.
For the first time, the department was this year able to connect the dots even without permanent account numbers (PAN).
"Some people feel, either through oversight or genuinely or consciously thought, that if you do not give PAN to a third party then the transaction would remain under the radar and not be linked to your return," Nair said. "So this time we picked up non-PAN data and started working on it."
The department has got data relating to 7 lakh high-value purchases and investments without PAN and is working on resolving these, then checking if these are errors of omission or commission.
"Where it has been done deliberately, we are going to reach those people and they either come in IDS or normal provisions of income tax act would apply. We will reach them," she said. IDS or Income Disclosure Scheme is the government's black money amnesty window that closes September 30.