Taking cognisance of the widespread criticism of the finance ministrys decision to introduce a complex, multi-page tax returns form to replace the single-page Saral, a committee of secretaries has criticised the new format and suggested some major changes.
The committee, headed by Cabinet secretary BK Chaturvedi, has picked several holes in the new version of the form, and, among other things, recommended the withdrawal of a controversial clause requiring tax payers to provide a detailed cash-flow statement.
A note prepared by the committee says, Schedule 5 of the form should be revised by obtaining information relating to exempted income, gifts, loans, etc instead of the detailed cash-flow statement. The note has been forwarded to the Prime Ministers Office.
The committee was entrusted with the task of examining the issue following the popular outcry against the new form. Besides coming under attack from the public, the revenue department was also taken to task by the Congress for going ahead with the switchover.
The committee favours a more compact form by omitting the detailed calculation procedure, and has recommended that a sample calculation sheet should be distributed along with the main form. This would enable tax payers to incorporate the relevant information without any unnecessary complications.
The returns form, the committee noted, should avoid any resemblance to a balance sheet where tax payers are required to enter details of each and every source of income and their expenses at the beginning and end of each financial year.
The committee members felt that people are generally wary of parting with such information, and suggested that the department could instead seek information only about transactions that are above a certain amount.
The committees recommendations are likely to add to the pressure on the revenue department to withdraw the new form altogether, and come out with a revised one. The department has, much to its dismay, discovered that its new proposal has few takers across the country.