‘Bure Din’ For Tax Defaulters As IT Dept Set To Revoke Their PAN Cards, LPG Subsidy
Willful tax defaulters in India may face some heat in the coming days as Income Tax Department has decided to take some aggressive steps against them. To start with, IT Dept. will block their PAN Cards, block their LPG subsidies and stop them from purchasing any property, as PAN card is required for such high transactions.
A special action plan has been created by the IT Dept, which states: “It is suggested that after due notice, PAN of such defaulters should be blocked in our system, in such a way that these defaulters should not be allowed to file their return of income, which means that they cannot avail the benefit of carry forward of business loss and losses under other heads where filing of return of income u/s 139(1) is mandatory,”
Earlier, IT Dept. had announced that they will publicly reveal names of all such tax defaulters and publish them on their website and top newspapers of the country. After Vijay Mallya fiasco, who has been declared as an absconder after fleeing India, bank officials are doing the same with loan defaulters.
Some of the steps which IT Dept. may take in coming days against tax defaulters include:
- IT Dept will share the names of such wilful tax defaulters with Credit Information Bureau (India) Ltd (CIBIL) so that they don’t get approval for loans and over-draft facility
- IT Dept. and CIBIL will share their databases to get access to such defaulters.
- Various types of subsidies such as LPG etc are directed linked with PAN Card, which would be completely blocked for such defaulters
- The list of wilful defaulters shall be shared with Registrar of Properties so that they are unable to purchase or sell any immovable property
PM Modi’s Crusade To Increase Tax Payers
Last week, PM Modi announced that his Govt. will attempt to include 10 crore Indians into the tax-bracket. Right now, India has a population of 125 crore with approximately 25 crore households; and out of them only 5.43 crore are tax payers.
He even mentioned that if a person searches ‘How to pay taxes in India’, then 7 crore results crop up; however, if one searches ‘How not to pay taxes in India’, then 12 crore results appear!
After PM Modi’s speech regarding this, Minister of State for Finance, Jayant Sinha, said, “Within the country, we have 5.43 crore taxpayers. Of them, 90% are e-filing and 60% of the refunds are issued within 30 days. The PM said we should raise our sights higher. We should make it very easy for people to file taxes and that we should legitimately aspire to achieve 10 crore taxpayers within our tax base”
However, later, Ministry of Finance clarified that PM Modi wants to widen the tax base, but there has been no ‘target’ set of 10 crore tax payers.
During 2014-15, Indian Govt. collected Rs 6.96 lakh crore as taxes from various provisions from these 5.96 crore tax paying Indians, which was 14% less than IT Dept.’s expectations.
Interestingly, there are several challenges infront of IT Dept. as well, when it comes to tax collection as only 8% of the tax collected comes from scrutiny of returns and 92% comes from Tax Collected at Source or TDS. Maybe IT Dept. needs to optimally use their 42,000 employees for better tax collection?
How can Indian Govt. increase tax collection? Blocking PAN Cards of tax defaulters is a good step?
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