‘File tax returns; we are watching what you do’
UNDER LENS Tax department only takes up those cases for scrutiny where there are information about tax evasion: CBDT chief
Big data on financial behaviour of individuals and businesses secured from sources ranging from social network to tax treaties is making tax administration faceless and non-intrusive, yet precise in picking up cases warranting a long, hard look. In an interview, Sushil Chandra, chairman of the Central Board of Direct Taxes (CBDT) spoke about how the approach to taxation is changing and how the authority is prepared to deal with corporations crossing the line in tax planning. Edited excerpts: We also have better technology to match this data with the tax profiles of those who have filed returns as well as of those who have not. That gives us a leverage to deepen the tax base. Our Project Insight that uses data analytics is ready and will be launched shortly. We get information about transactions such as car and property purchase and a host of other financial transactions. If the data we get do not match with the tax profile of assessee, it warrants a scrutiny. We have identified 14,000 people who bought property worth over ₹1 crore but have not filed returns. We are taking action against them. All investments are on our radar. returns do not meet standard parameters. Less than one per cent of all returns are picked up for scrutiny. Nearly half of all cases chosen for scrutiny are subjected to only limited scrutiny where explanations are sought on a specific transaction. Scrutiny has not gone up. Rather, we would like to reduce it further and act only on specific information. We also allow e-assessment for limited scrutiny. Our job is to ensure that honest tax payers’ life is easier and hassle-free, while tax evaders should be brought to justice. less than ₹50 crore a year). That covered 96% of companies in the country. We are in the mode of phasing out more corporate tax exemptions. When there is higher tax buoyancy, the government will consider further tax rate cuts. In personal income tax, we have already reduced the rate to 5% (on income between ₹2.5-5 lakh). If you take into account the tax exemption limit of ₹2.5 lakh and the benefit of ₹1.5 lakh deduction under 80C (investments in provident fund, life insurance premium payments etc), income tax in India is the lowest in the world. The mindset of concealing income should change when tax rates are so low.