Our Bureau

New Delhi, Dec. 23

THE `one-by-six' scheme that was introduced by the Government to identify potential taxpayers based on certain indicators may be losing its sheen.

The number of returns filed under the scheme has come down from a high of 30.59 lakh in fiscal 2001-02 to a mere 61,000 in 2004-05.

According to figures provided by the Government in a written reply in Parliament, there has been a sharp decline during the intervening years too. Thus, in 2002-03 the number of returns came down to 4.95 lakh followed by another sharp decline in 2003-04 when 71,000 returns were filed under the scheme.

Finance Ministry sources said that they were not quite certain on the causes for the decline in numbers. However, they said that it could probably be because those who had filed returns earlier were graduating to filing returns in the regular course and not under the scheme.

Senior chartered accountant and Co-chairman of Assocham's expert committee on direct taxes, Mr Ved Jain, said that besides the possibility of people upgrading to the normal returns, the other reason for the decline could be the possibility of dropouts.

Mr Jain said that another reason could be that those covered under one-by-six criteria could have filed their returns directly under the regular route instead of filing the return under the scheme.

The one-by-six scheme was introduced with effect from August 1, 1998. Under the original scheme, people were required to file returns if they had undertaken certain type of activities or owned certain items identified under the scheme.

These included undertaking foreign air travel during the year, owning a telephone, using a credit card, being members of certain clubs, own or lease a motor vehicle or occupy floor area above a certain level.

However, the Government kept changing the criteria from time to time to keep pace with the changing preference of people who could be potential taxpayers but were not filing returns.

Thus, while use of mobiles phones found the way into the list at one point replacing fixed-line phones, it was subsequently dropped with usage of the gadget seeping down to the lower earning levels and give a fillip to the nascent industry.

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(This article was published in the Business Line print edition dated December 24, 2005)
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