Taxhounds readying data bank to chase defaulters

Last updated: 01 June 2007 Follow on Google News

  PAY your taxes honestly and in time. The income-tax department is now going whole hog after recovery of tax arrears.

    As a part of this exercise, the Central Board of Direct Taxes is creating a data bank of those assessees who have defaulted on payment of tax to the government and owe huge sums in arrears. The board has shot off letters to field formations asking them to prepare lists of such assessees, a government source said.

    With data on tax defaulters available at a click of mouse, the income-tax department can work out special strategies for recovery of tax from them. One of the options with the department is making the names of such assessees public. Although, a final view on this yet to be taken, the option is not completely ruled out.

    The data bank would help the board in day to day monitoring of the recovery on arrears front. The board could then issue specific directions to field formations on what strategy or action plan it needs to formulate to recover the arrears. The data could also be matched with information being thrown up by other information systems like annual information returns, to check wilful evasion. The department has already created a software which will help in creating a 360 degree profile of tax payers.

    The arrears which have been classified as difficult to recover by income-tax department is pegged at Rs 1,03,900 crore. The total arrears collection in 2006-07 had overshot the Budget target of Rs 11,700 crore to reach Rs 12,285 crore. Majority of this demand is usually locked up in various stages of litigation or legal proceedings.

    While the department is continuously looking for new avenues to enhance tax collection, the general view is that emphasis should also be placed on arrears. Encouraged by the arrears collections in 2006-07, the department is placing increased reliance on it in 2007-08.

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Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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