Preparations for relief to income tax payers

Jaipur: The Central govt is preparing to give relief to the income tax payers of the country. The govt is preparing to accept the black money caught in income tax raids and survey action with changes in the income tax law and close these cases after paying a lump sum income tax on it. A proposal has been given in this regard, which will be effective from 1st September. It is believed that the govt’s intention behind this exercise is to reduce the number of cases between the taxpayers and the department along with raising maximum revenue, increasing compliance of income tax rules and also giving an opportunity to the taxpayers who evade income tax to correct their mistake.

The current process of settlement of income tax raids and surveys is not only very long and painful, but the department also has to wait for years to recover the revenue. There has always been a dispute between the officers taking action and the taxpayers regarding the so-called black money caught or calculated. For this dispute, taxpayers have generally been pleading for justice from income tax appeal to appellate tribunal, high court and Supreme Court, which takes years to be resolved. The current situation is also that even if taxpayers get relief at any level, not only the taxpayers but even their tax advisors have to work hard to get it, whereas on the contrary, if any liability arises on the taxpayer, then the officers, barring exceptions, do not delay even a day for recovery, whether the recovery process is legally correct or not. In such a situation, the option of paying 60% income tax on the black money caught in income tax raids and surveys can also encourage taxpayers to pay the correct income tax and a significant decrease in litigation can also be expected from this. The special thing that is being told is that if the taxpayer is ready to pay income tax on any amount other than the black income mentioned by the department, then he will have to pay income tax at the rate of only 50%.

Chief Income Tax Advisor CA O.P. Agarwal says that the Union Budget indicates plans to simplify the Income Tax Act and reduce disputes between taxpayers and the department. The government aims to amend the Act to resolve long-pending cases promptly. Additionally, the reintroduction of the Vivaad se Vishwas scheme aims to settle pending cases with the Income Tax Department. The decision to close cases with a 60% tax payment on black money caught in tax raids is a positive step, though further clarification is needed.

Income tax consultant and former general secretary of the Federation of Rajasthan Trade and Industries, CA Vijay Goyal, supports this move towards simplifying income tax laws and reducing disputes. If the department accepts black money discovered in raids and allows settlement with a 60% tax payment, cases that usually drag on for years could be resolved swiftly. This would expedite departmental work and reduce taxpayer harassment. The Vivaad se Vishwas scheme appears beneficial, but its details are awaited. Simplifications in income tax law within the next six months could improve revenue collection and streamline processes, boosting govt revenue.

Concerns exist about the option to pay tax on black money caught in raids and the related sixyear block assessment.