The Central Board of Direct Taxes (CBDT) will soon come up with a single-window financial information database of taxpayers, which will have a 360 degree profiling of income, source of income and spending.
The database will be set up later this year and will be fully operational next year.
“It is called the Income Tax Business Application (ITBA), and once ready, it will improve data mining and business intelligence of the department and the taxman,” said Anita Kapur, chairperson, CBDT. “We get information from various sources such as tax deducted at source, annual information reports, excise, service tax and value-added tax. But they are all in silos,” she added.
Of the total 3.5 crore returns filed annually, the tax department selects 3,00,000 to 4,00,000 cases for scrutiny, based on risk profiling.
The ITBA will collate all information based on the taxpayer’s permanent account number (PAN), which will be used as a ready reckoner for the assessing officer before he goes for a search and seizure operation.
“We try to ensure that our tax regime remains non-intrusive....but there are certain people or cases against whom intrusive action is required… collection should be taken to a logical conclusion, which is that an evader not only pays penalty (on the tax evaded) but is also prosecuted,” Kapoor added.
Meanwhile, in a breather for investors, the CBDT also said taxmen won’t resort to coercive methods to recover dues towards minimum alternate tax (MAT) on capital gains made by FIIs and will wait for the Supreme Court order on the issue.
It added that the tax department will defend the Rs 20,495-crore tax claim on Cairn India, even though the company has merged with Vedanta Ltd.