It is given to understand as follows:
Only 3% of the Indian Population pays Income Tax and this is one of the lowest percentages in the world. Holding a PAN Card is the first step before paying Income Tax. According to government data, there are 203 PAN cards for every 1000 population in the country. In terms of absolute numbers, there are 24.56 crore PAN cards in the country. (Source: www.newslaundry.com on 15-03-2016).
Income Tax Department through data mining has identified 67.54 lakh potential non-filers of income tax returns (Source: DECCAN CHRONICLE dated Dec 23, 2016).
An article captioned as “PAN Cards exceeds the number of Taxpayers” published in www.taxguru.in on 25-03-2017 conveys as “The CAG report points out that the Central Board of Direct Taxes (CBDT) needs to identify the reasons for the huge gap between the number of PAN Cards and the Number of Taxpayers who actually file returns”.
In my opinion, the Central Board of Direct Taxes (CBDT) needs to assure, support, encourage & facilitate identified prospective assessees, as a first step, for diminishing the huge gap between the number of PAN Card holders and the Number of Taxpayers who actually file returns”. For enhancing the number of Income Tax Payers, the following measures have to be taken up at once:
(1) Introducing a very simplified & hassle-free ITR Form for the First Time Filers of Return of Income & ensure harassment-free assessment, in the following manner:
Every citizen, preferably the modest income earner, deserves to be undisturbed and live peaceful, and for that reason one may be ready to pay the exact liability of tax. Yet, fear about the powers & over empowerment of the Assessing Officers as provided under Income Tax Law, and even its misuse by the corruptive officials, is all standing hazardous in the way of voluntarily fling of Returns of Income. For an example, if an AO misuses his powers and intentionally passes his Best Judgment order under Section 144 of the Income Tax Act, there may be Appellate Authorities to put the same before them (AAs) and plead about the Assessee’s Grievance/Objection over it, but that will not only waste the valuable time & money of the Upcoming Assessee, but also causes an un-repairable damage to his business or earning activity. If the Tax Payers Number is to be enhanced, there ought to be a very simplified & hassle-free ITR Form for the First Time Filers of Return of Income and has to provide certain relaxations to the New & Progressive Assessees, as follows:
(A) There should not be any Scrutiny of Return/Case, in the cases of New & Small Assessees.
(B) While passing assessment orders in lieu of first 5 assessment years or first 5 “Returns of Income” voluntarily filed by every New & Small Assessees, has to approve the income declared as it is, as filed by the Assessee.
(C) Even, search & survey, reopening for Review/Revision/Re-assessment of the case should not be carried in future, as far as first 5 assessment years or first 5 “Returns of Income” voluntarily filed by every New & Small Assessees.
(D) Similarly, after passing the assessment order/s as above, only the assessee could be entitled to seek rectification, if any, as per Section 154 of the Income Tax Act, but the AOs or IT Authorities should not do so on a suo-moto basis.
(E) The New & Small Assessees ought to be defined as “all those who file their Returns of Income voluntarily declaring their Net income below Rs.10 Lacs are called New & Small Assessees for first 5 assessment years or first 5 “Returns of Income” voluntarily filed by them”.
(2) Streamline & Validate the Old and Older IT PANs issued so far, in the following manner:
A Notification need to be issued inviting all IT PAN Card holders [who are Non-filers of ITRs] to submit the following information to the Department, before closure of scheduled last date for filing, if they are interested to keep alive their IT PAN Card:
(A) The True Purpose, for which the IT PAN Card had been obtained by the holder of the same then.
(B) Then source/s of (earlier) Livelihood/Income for the survival of, by the IT PAN Card holder & his/her family and dependents:
(C) The present Profession/Business/Employment being carrying out for earning Livelihood/ Income for the survival by the IT PAN Card holder & his/her family and dependents:
(D) The places & purposes as to where & why the holder of IT PAN Card had been utilized/utilizing it:
(E) The Reason/s as to why he/she could not file the ITR for atleast one Assessment Year, so far (even declaring non-taxable income itself) even-though holding the IT PAN Card since long back:
(F) The details about the following belonging to the IT PAN Card holder & his/her family and dependents:
a) Details of Land Properties (including Agricultural Lands)
b) Details of Housing Properties holding:
c) Details of Life Insurance Policies Holding:
d) Details of Fixed Deposits, Shares, etc., if any:
e) Details of Bank Accounts holding:
(G) The total number of members in the family of IT PAN Card holder and probable monthly expenditure of his/her family:
In fact, before releasing the Notification to Press & Media, a specialized format containing scope for every minute coverage of all the above information is to be kept ready at the ASK Centers or the rest of Field Offices of the Income Tax Department, for easily obtaining the same by the IT PAN Card holders.
(3) Make a Mandate that every holder of the IT PAN Card must file regularly the ITR (even if they have Non-Taxable Income).