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Budget
The `direct' impact
T. C. A. Ramanujam
The Income-Tax Department boasts of having nearly three crore individual taxpayers on file.
The raising of tax exemption limit by Rs 10,000 across-the-board for all non-corporate taxpayers will bring down the number of taxpayers on file.
The doubling of the limit for levying the Banking Cash Transactions Tax will reduce the workload. But the I-T Department will face increasing pressure by the Budget announcements.
The Permanent Account Number will hereafter be the sole identification number for all participants in the securities market with an alpha-numeric prefix or suffix to distinguish the kind of account.
The Department will have to ensure that there is no duplication of PAN even as the workload on account of its issue gets doubled.
Companies in free-trade zones and 100 per cent Export Promotion Zones will now be covered under the Minimum Alternate Tax. TDS provisions have been tightened and there is partial withdrawal of exemption given to individuals and HUF responsible for paying any sum to contractors/ sub-contractors.
The Appellate Tribunal can grant stay of demand for 180 days in the fist instance and another 180 days in the second instance and no more. The Settlement Commission cannot admit applications for settlement unless there is a disclosure of additional income of Rs 3 lakh against Rs 1 lakh now.
Coverage of the Annual Information Returns has been expanded. The Refund Banker System will now be extended to more areas. E-payment facility is extended to more Banks. The Government is creating new Large Taxpayer Units in more places.
Electronic filing of returns will be made mandatory for more categories of taxpayers.
Cost of collection as on date is about Rs 1,227 crore (0.74 per cent). It is likely the cost will go down further.
The cost of compliance however will go up because of the tightening of the rules for collection, assessment and appeal.
(The author is a former Chief Commissioner of Income-Tax.)
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