Small taxpayers and senior citizens may have some cause for cheer.
The Central Board of Direct Taxes (CBDT) on Monday said that it would not subject the returns filed by senior citizens and small taxpayers to scrutiny during financial year 2011-12 in a routine manner.
During the financial year 2011-12, the cases of senior citizens, individuals who are 60 years or more, and small taxpayers, individuals and HUFs with gross total income of Rs 10 lakh, will be subjected to scrutiny “only where the income-tax department is in possession of credible information”, the CBDT said in a statement here.
This move comes in the backdrop of concerns expressed by small taxpayers and senior citizens about “prolonged enquiries”. Concerns had also been raised about selection of the same cases in scrutiny year after year, the CBDT pointed out.
Scrutiny of tax returns is a mechanism used by the Tax Department to ensure taxpayer compliance and also counter tax evasion.
“The latest CBDT announcement is another step that would ensure increased level of voluntary tax compliance by small taxpayers,” Mr Aseem Chawla, Tax Partner, Amarchand & Mangaldas, told Business Line .