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Disclosures and disincentivesApr 21, 2015 12:34 AM | 26 comments

The hasty and perfunctory manner in which new requirements were sought to be includedin the income tax return forms from the assessment year 2015-16 does not augur well forhassle-free tax administration. Thankfully, the revenue authorities made a quick retreatafter Finance Minister Arun Jaitley ordered a review, but the overall impression is that taxauthorities are constantly trying to introduce new forms of practical difficulties in the nameof improving tax administration, widening the tax base and unearthing black money. Thelatest changes sprung on the public required assessees to disclose all instances of foreigntravel during the previous year, the countries visited and expenses incurred from one’s ownsources by resident Indians in the course of such travel. In addition, the forms asked fordisclosures on the number of bank accounts held by an individual at any time in theprevious fiscal, including those that were closed, along with details of the banks, IFSC codeand joint account holders, if any. On the face of it, there may be nothing wrong in seekingsuch disclosures. Many people do park undisclosed sums in additional bank accounts andincur expenditure during foreign travel, and encouraging such disclosures would indeedenable the taxman to keep an eye on the possible involvement of unaccounted money.However, existing provisions and procedures enable the tax authorities to monitor suchactivities, and all that such new measures will achieve is a needless increase in paperwork.

For instance, know-your-customer norms ensure that every bank account is linked to aPermanent Account Number, and interest accruing in such accounts is easily traceable.Similarly, immigration authorities do have a record of foreign trips, and passport entries canbe used to verify the travel details of anyone under scrutiny. It may not be easy foreveryone to maintain separate accounts of expenditure incurred from personal sources andspending made on their behalf by companies or others sponsoring foreign trips. Theincome tax authorities often argue that the existing tax base is inadequate and enhancedforms of scrutiny are required to enable more people to be brought under the tax scanner.For a country with as large a population as India’s, the number of assessees is obviouslytoo low. However, the moot question is whether it is wise to introduce measures that willmake it difficult to file tax returns and discourage potential assessees from entering the taxnet voluntarily. The government’s efforts to curb and unearth unaccounted money requirewide public support, but at the same time the authorities should not do anything that maydeter people from making the shift from evasion mode to tax compliance.

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Comments (26)

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LatestComments (26)

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S Shukla from Jaipur

In a country like india, where only 2-3% of people pay income tax such provisionsmostly increases the problems of salaried employees and nothing less. I personallybelieve that if income tax authorities tries to increase the coverage of those payingtaxes instead of making things more difficult for the citizens who are alreadypaying taxes now, then it will be more fair and worthy. Most of business people getaway from the paying fair amount of taxes and small businessmen do not even feelthe need to file any return. If income tax authorities at all bother to pay someattention, then they will find many small shopkeepers, businessmen & selfemployed individuals who do not even pay a single penny as taxes and theirmoney is making them more richer than any decent working class or salariedprofessional. But the sad fact is nobody is even bothered about such unfair thingshappening in our own country & between our own people.

6 days ago · (0) · (0) · reply (0) ·

Seema from New Delhi

In India, it is the business class, politicians and bureaucrats who have unaccountedmoney. Income tax department has to devise ways and means to drawinformation. Yes, filling up details of foreign tours , bank accounts operated in afiscal year are sure shot methods, to assess income and tax incurred. Why theproposed provision has been scrapped is beyond reason!

6 days ago · (0) · (0) · reply (0) ·

Points1200

A from Bangalore

With the IT boom many a senior citizens travel abroad to take care the grandsons /granddaughters. Maximum they can stay is six months and thus the parents inlaws share wherever possible. Making these simple people to file all the relevantinformation in the IT form is rediculus They leave the sharks and try to catch holdof small fish Great administration

6 days ago · (0) · (0) · reply (0) ·

Points990

APUPADHYAY from New Delhi

Most of the Public Sector Banks are without Foreign Exchange or Demat or PPFund or Advances against Securities. This has led to multiple avcounts. Can anyExpert compute the cost of erstwhile equity of DCM or Reliance or Unilever etcwhich has been divided in multkple companies Even consolidating Assets in verysmall lot shares has been deemed a crime and so letting TDS T to treasury. In steadof catching Sharks based in Tax Free Mauritious etc, they have issued notices topoor Octagenarians and nearly blind old women. Is it Saral Tax collection of Modi? Points

1095

6 days ago · (0) · (0) · reply (0) ·

1095

Bharat from Delhi

I congratulate PM Modi this is absolutely required to trace the Black MoneySloshing around in gay abandon in India .We Indians have low moral fibre andneed to be treated as Thieves until proven otherwise

6 days ago · (0) · (0) · reply (0) ·

Sunil from Bangalore

Change in IT forms are welcome, but only when they are easy to apply withminimum information and maximum derivatives. One card, One Nation policy ofAadhaar card was smooth but what about its RoI are they fully utilized. Allstatements which IT agents needs can be solved only when single instrumentsrecords all with details and citizens get benefits out of it. We dont mind submittingIT about all the details of a/c, trips and expenses abroad. But this can also be donein smooth if all can be linked to single payment-cum-record mode. Govt should usethe easiness of aadhaar. This will solve the aim to track the co called black moneyor dream coins of govt.

6 days ago · (0) · (0) · reply (0) ·

Points120

Rameeza.A.Rasheed from Chennai

How many committees have been appointed in India so far, to makerecommendations for for simplification and rationalisation of the Indian tax system. Still we have not achieved that goal . The beneficiaries are the auditors , because,even for the highly educated salaried class ,the self assessment income tax formsare not intelligible .Now thay are making it more complicated

6 days ago · (0) · (0) · reply (0) ·

Points195

N Prasad from Nellore

The key question is how does this information widen the tax base. If more peopleshould be brought under tax net, how does seeking more information fromexisting tax payers help?

6 days ago · (2) · (0) · reply (0) · smarthandam · MUKUNDARAJAN Up Voted

Parth Garg from Noida

PM's next destination should be Switzerland where he should use his internationalimage and diplomacy to convince the banks there to return the money belongingto Indians -black or white. So that his FM will not have tap/trap the Indiantaxpayers through the complicated return form.

6 days ago · (0) · (0) · reply (1) ·

Points3565

APUPADHYAY

wow! Only a fool will park money in bank here or in swiss one.

3 days ago · (0) · (0) · reply (0) ·

3 days ago · (0) · (0) · reply (0) ·

Raju from Bangalore

when the black money lies with the crore patis why so much hassle been createdfor every common man, instead of harassing the public the authorities should finda way among themselves and take the responsibility of tracking and findinginformation using their resources, after all they are paid for that but not to irritateus.

6 days ago · (2) · (0) · reply (0) · kundankumar · KSelvam Up Voted

Points1460

Phil from Kolkata

I a senior citizen will now, have to go to a professional to file my returns as the newsystem and is so complicated. Even after paying taxes we get no benefit. Since I ama senior I spend most of money on medicals

6 days ago · (0) · (0) · reply (0) ·

Sajina from Coimbatore

Tax evasion can easily control by this new scheme. This will improve tax collection...why government cancel this decision.?

6 days ago · (0) · (2) · reply (1) · APUPADHYAY Down Voted

Points380

APUPADHYAY from New Delhi

Are u Tax Pdofessional? First please remove circle rates registry thatgenerates black money &so is gold diamonds.

6 days ago · (0) · (0) · reply (1) ·

Sajina

Idea is good

3 days ago · (0) · (0) · reply (1) ·

APUPADHYAY

Thanks for good appraisal.

3 days ago · (0) · (0) · reply (0) ·

Madan Mohan from Mumbai

Natural instinct of amassing wealth by any means for name and fame lies in theroot of.tax evasions.The proposed and held up changes in ITR's will complicatereturn form.I suggest collection of proposed changes through a separateproject.Family income as assessment criteria with different exemptions for singleincome family and others may be tried.Rich farmers farm house and coachingcentre honours and others of such type to be explored for taxation.May be lump

centre honours and others of such type to be explored for taxation.May be lumpsome but MP's,MLA's also be taxed for the system.

6 days ago · (0) · (0) · reply (0) ·

R.Suntharalingam from Colombo

More the declarations to be made ,more complicated the issue becomes ,more isthe scope for, shall we say tax avoidance and even evasion and opening madewider for the entry of sophisticated professional handling and its adverseconsequences to the national coffer . What is denied to the national coffer doesnot leave the system, it changes hands more than that retained as the declarants'secured income. If the declaration could be simplified to include the receipts lessdisposable income , giving the liable income without leaving room for exploitingthe loopholes existing or brought in by sleight of hand so to say may be thought ofseriously.

6 days ago · (0) · (0) · reply (0) ·

Points355

Chandra Sekar PGT at DAV Matriculation Higher Secondary School from Bangalore

Finance ministry ought to see that there must be hassle-free procedure in filingincome tax, for already the KNC gives all the details of the bank account holderswith the Adar card number. Hence,it would be utter chaos, if the filing proceduresare made to be more cumbersome.Even the immigration authorities do maintainthe records of the foreign travelers for any interrogation. E.S.ChandrasekaranChennai-600037

6 days ago · (0) · (0) · reply (0) ·

Points315

V. BALASUBRAMANIAN from Mountain View

Will the government ensure prompt and best medical treatment to all seniorcitizen as it is duty found when it expects to crab all savings in the form revised I.T.Return forms. It is needless to mention such saved money is spend and multi-speciality hospitals flourish in business. So called public servant / politicians neverbother about all thses things.

6 days ago · (0) · (0) · reply (1) ·

APUPADHYAY

Will any good samaritan advise this octagenarian whose sons have beensqueezed out that there is any hospital in India that will take care of mewith DGHC CARD & without any attendant?

3 days ago · (0) · (0) · reply (0) ·

Hariharan Pv at Sumangali Seva Ashrama, Bangalore from Mumbai

It would be wise and worthwhile to totally abolish Income Tax, and in its place, theGovernment could introduce a "withdrawal cess" on all moneys transacted. Thiswould not only help in bringing out Black Money, but none would carry on anyunderhand transactions, as there is no worry of any taxes. Money availabilitywould treble, and many projects would not starve for money

6 days ago · (0) · (0) · reply (0) ·

Points7450

Krishnamurthy.B.R> from Bangalore

In the mother land of mine,we are no 1 deshabhakthas. As youngman i was toldCOUNTRY FIRST individuals next. But the incometax department has treated taxpayer as a dishonest person. Every angle one looks at the administration keeps onbanging the tax payer only. Dont they have other ways of enhancing taxcollection?? My very good friend and chaterered accountant once told DO NOTEVADE TAX BUT AVOID TAX WITH PLAN. Now at 64yrs of age.i am fed up hearingdis honesty in tax matters. I beg the finance minister and the nitin gatkaricommittee(which suggested prepoll abolition of IT and alternate way like banktransaction tax). SIMPLIFY TAX LAWS AND REDUCE RATES AND SEE. Honest citizensand patriots of this country will get you more than before. The lazy systemadmistration should respect tax payer FIRST. Tax payer is treated very shabby inthis system. Foriegn travel details to be included in your IT return?? oh!! My is thetax department so despo??? .please withdraw this instruction

6 days ago · (0) · (0) · reply (1) ·

APUPADHYAY from New Delhi

Very true. If u paid TDS on renting to Govt. u t thief. now. Now do digsomd e CA to get refund. Better.

6 days ago · (0) · (0) · reply (0) ·

Kharat from Pune

As of today, new form is not available on IT dept website. 1. Those who travelabroad by taking pains, can surely take a little more pain of typing a couple of linesin a form, as they do it on every take off or lending ports during their journey, whilein the IT form it is to be done only once. 2. All accounts (including closed ones )which are seeded with Aadhar are updated on the server (most probably of NPCI).Those who tries to check the status of subsidy of gas cylinder on the website of gascompany, gets the status of all accounts (including closed ones) held by thembesides the account details given to gas company,by them. If this info can besupplied to / allowed to be accessed to a gas company, then surely IT dept can alsoaccess it or supplied with. It is really a simple matter. Similarly DGCA or otherauthorities can also supply data to IT dept. Issue needs to de-hyped and should notbe reversed at least for the people who do it online.

6 days ago · (0) · (0) · reply (0) ·

Points145

Narasimhan Kannan at KK Women's and Children's Hospital from Singapore

The Traces website for paying adance tax is a painful and slow website . I have paidtax to government regularly.I have got no benefit from govt.All the freebies anddished out to poor.I have to bribe govt officials for gas,ID Proof,passport etc.I feelthat i am being cheated by the bad system.The new forms add to my harassment.

6 days ago · (0) · (0) · reply (1) ·

Points330

APUPADHYAY

Horrible & shameful

3 days ago · (0) · (0) · reply (0) ·

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3 days ago · (0) · (0) · reply (0) ·

Sohan from Cuyahoga Falls

More than 95% taxpayers are not affected by these requirements imposed by theTax authorities. Those who are affected belong to the upper strata of the societyand get their taxes done by the professional.The noise against these additionalrules shouldn't be entertained.

6 days ago · (0) · (0) · reply (0) ·

Points200

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