Monday, February 18, 2013

Are you are a PAN holder not filing tax returns? Read this!

Are you are a PAN holder not filing tax returns? Read this!
 
Quite a few citizens, in their endeavour to earn high disposable income evade tax direct taxes. But let us apprise you that in the game of 'hide and seek' with the tax authorities, there are likely chances that one getting caught and facing prosecution. Likewise not filing a return, despite one holding a Permanent Account Number (PAN) could land one in trouble. Moreover, now that the Government of India is determined to achieve the fiscal deficit target of 5.3% for the present fiscal year, and the target for next year too fixed at 4.8%, the tax authorities could eye on those not paying their due taxes. 

In fact the Finance Minister (FM) recently issued stern warnings to taxpayers to disclose their to disclose their true income and pay taxes or be ready to face action, warning that it has information on over 12 lakh non-filers.

According to the ministry, letters have been sent to 35,170 PAN holders by the directorate of intelligence and criminal investigation, seeking to know why they have not filed tax returns.The said letters of enquiry contains the summary of the information of financial transactions along with a customised response sheet and seeks to know whether the person had filed his income tax return or not. 

Moreover the ministry has also set up a nodal cell to capture the response and take follow-up action. Therefore on-line monitoring would happen to ensure follow-up action and track return filing and tax payment of the target segment. 

This is indeed a very vigilant step from the Government in power in its aim to achieve the fiscal deficit set for this year as well as the year next. The move is aimed to increase the country’s tax-to-GDP ratio, which is one the lowest amongst its peers. So far the gross direct tax receipts in the first 10 months of the current fiscal year has been Rs 4,55,125 crore thereby rising by 7.0% from the same period a year ago. It is noteworthy that corporate tax collection for the same period rose 3.71% to Rs 2,96,451 crore. Meanwhile, the net direct tax collection rose 12.49 % to Rs 3,90,310 crore, up from Rs 3,46,959 crore collected in the same period last fiscal.

We believe that along with economic growth, robust consumerism and high savings rate; it is imperative for the Government to have anoptimal tax-to-GDP ratio which can facilitate to put public finances in place and give better facilities to its citizens. Thus paying taxes should be viewed as moral responsibility by citizens. 

At present the National Council of Educational Research and Training (NCERT), has already introduced a wide variety of topics, including history of taxation, rationale for taxes, how the government raises revenues and spends as part of the curriculum, to be taught to children between 10-18 age-group; so in that sense a moral responsibility is tried to be infused at the very young age. Sometime back in October 2012, the Finance Ministry was also mulling ways of making tax payments, a fundamental duty to abide by. But it noteworthy that since fundamental duties are not legally enforceable, it may not help the Government to get more people to pay taxes.

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