Economy

Income Tax Dept. can reveal taxpayers’ details

The taxman can reveal information related to taxpayers disclosing previously concealed income under the Budget’s Income Declaration Scheme, if it is deemed to be in public interest.

An amendment to this effect has been made in the Finance Bill of 2016 approved by the Lok Sabha.

Tax experts said the amendment is aimed to allay any misconceptions that the government would keep such taxpayers' details confidential under any circumstance.

Penal tax rate

The Income Declaration Scheme offers people with undisclosed income to declare it by paying a penal tax rate of 45 per cent on such income. The final version of the Finance Bill okayed by the Lok Sabha has imported Section 138 of the Income Tax Act into the declaration scheme's ambit.

Objectivity

“Bringing in Section 138 to the Scheme brings in objectivity on confidentiality of income tax information and the limitations thereof,” Rahul Garg, leader of the direct tax practice at PwC India told The Hindu. “This is appropriate to ensure that people don’t misunderstand the confidentiality aspect.” In other words, the aim behind bringing in this section is to dispel the perception that the details disclosed under the scheme are confidential under any circumstances — they can be disclosed if it is deemed to be in public interest.

The key to this, according to tax experts, is the objectivity of the Chief Commissioner.

“The discretion has been given to the Chief Commissioner who is a very senior authority and he has to see if it is in public interest to share the information,” Amitabh Singh, a tax consultant, said. “Even the Supreme Court has not been able to convince the Reserve Bank of India to make public the names of wilful bank loan defaulters.”

“I doubt any Chief Commissioner will risk his career by disclosing the information. He will not do it without political pressure and backing,” Mr. Singh said.

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Printable version | Oct 24, 2020 3:36:26 PM | https://www.thehindu.com/business/Economy/Income-Tax-Dept.-can-reveal-taxpayers%E2%80%99-details/article14304635.ece

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