Finance Minister P.Chidambaram on Saturday said there is need to move towards a technology driven tax administration and called on all assesses to file tax returns.
“We will have to get each one of the 28 lakh tax deductees (under TDS). The tax amount would be credited to the government and refund would be credited to the deductee. And this can be done only if we move to technology,” Mr. Chidambaram said.
“Income tax department is moving towards information technology. This will process TDS returns, capture massive data so that government gets revenue and taxpayer gets refund,” he said.
The Finance Minister was speaking to reporters after inaugurating the Centralised Processing Cell (CPC) of the Income Tax department here. The CPC would process all Tax Deducted at Source (TDS) applications and would help ease the compliance procedure for taxpayers.
“We have around 28 lakh deductees, of which only 14 lakh people have filed return. The other 14 lakh do not file return. We do not know whether they are filing TDS,” Mr. Chidambaram said.
A technology driven tax administration would assist the tax deductor, tax collector and also the payee, he said, adding it will help all the three get linked to each other without being manually involved in the process.
The target for collection of direct taxes for the current fiscal is fixed at Rs 5,70,251 crore, a 15 per cent growth over the previous year target.
The gross collection of direct taxes stood at over Rs 4.55 lakh crore during the April-January period of current fiscal, as against Rs 4.25 lakh crore in the same period in 2011-12.
Till mid-December of the current fiscal, the revenue department had refunded Rs 57,000 crore, against Rs 70,000 crore in the same period of the previous financial year.
Faced with widening fiscal deficit, the government had earlier issued stern warning to tax evaders, asking them to disclose their correct income and pay advance tax by due date or be prepared to face action.
Despite slowdown in economic activities, the government has said it is confident of meeting the Rs 5.70 lakh crore direct tax target for the fiscal. Direct taxes include income tax, corporate tax and wealth tax.
Infosys which is also a partner in the CPC project, said in a statement that the TDS facility will process more than 400 million tax deduction submissions filed by nearly one million entities annually.
Infosys has been processing tax returns filed online by Indian citizens since 2008. Till date, it has successfully processed more than 30 million tax filings and related refunds, the company said.
In 2011, the income tax department selected Infosys as its managed services provider to facilitate central processing of TDS filings by business entities.
As part of this new agreement, Infosys provides comprehensive services to the department including technology infrastructure, maintenance, and upgrade of applications for the tax deduction reconciliation, analysis, and correction enabling system, better known as TRACES, the statement said.
The new centralised system will enable real-time reconciliation of TDS filings and refund claims, instant detection of erroneous claims and faster payment of verified claims, and significant savings for the government by reducing the interest accumulation on delayed tax refunds.
“The launch of the new CPC will play a key role in increasing the efficiency of tax filing for entities and processing of TDS for the Income Tax Department. We are delighted to partner with the ITD in their endeavour to improve the tax-payer experience in India,” Infosys Head (India Business) C.N.Raghupati said.