The Hindu Business Line : Cabinet clears second phase of Tax Information Network

THE Union Cabinet has approved the setting up of phase-II of Tax Information Network (TIN) at an estimated expenditure of Rs 101.25 crore over three years.

While the Government would pay Rs 68.75 crore towards the project, the balance amount (Rs 32.5 crore) is to be realised from "deductors" (entities or persons deducting income tax at source) through filing fees. The filing-fees (basically uplinking charges) would be payable at the TIN facilitation centre and the quantum of fees payable would depend on the number of deductees involved.

The year-wise outgo towards the project would be Rs 33.75 crore in financial years 2005-06, 2006-07 and 2007-08, an official spokesperson said.

The minimum amount payable to National Securities Depository Ltd (NSDL) would be Rs 88.80 crore, out of which Rs 56.25 crore would be payable by the department and Rs 32.55 crore would be realised from deductors.

The decision to set up TIN was announced in the Budget of 2003. It was decided that TIN would be set up in two phases and NSDL would host it.

The phase-II of TIN is expected to get operational before the stipulated time for e-filing of first quarter returns (during financial year 2005-06) by 2005-06.

Under phase-II, collation of deductee-wise data in tax deduction at source (TDS)/Tax Collection at Source (TCS) returns for eventual dematerialisation of TDS certificates, computerisation of Annual Information Returns (AIR) of high value transactions and integration of information relating to processing of returns of income are to be taken up.

While computerisation of AIRs is expected to help widen and deepen tax base, the dematerialisation of TDS and TCS certificates would enable paperless filing of returns of income by the deductees on Internet.

Further, cross-verification of TDS and TCS deducted by the deductors vis-à-vis credit claimed by corresponding deductees would eliminate frauds. The e-filing of TDS returns by Government deductors in addition to corporate deductors would eliminate requirement to enclose copies of challans etc and result in significant reduction in cost of compliance, a government official said.

An official spokesperson also said that necessary legal changes have been made in the Income Tax Act, with effect from April 1,2005.

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