AMIT BAJAJ ADVOCATE

Government plans to allow reopening of income tax returns of past 16 years of suspected assessees, as against 6 years at present. The move is aimed at strengthening the mechanism to investigate black money cases.

A Finance Ministry official said in New Delhi that extending the period of reopening returns is to unearth undisclosed income and to empower tax officials to go deeper into the income and expenditure details of suspected persons and business firms.




The government is likely to amend the Income Tax Act of 1961 which allows tax officials to reassess tax returns only upto the past six years now.

As per the above news if the amendment is carried in the Income Tax Act so as to increase the period of reassessment from 6 Years to 16 years then the assessees will have to keep the record of last 16 years and they could be questioned about the income they have earned upto 16 years ago.  

As per the Income Tax Act, specified entities are required to furnish AIRs of specified financial transactions recorded by them in a financial year to the income tax authority. The income tax department can detect tax evasion by verifying AIR information with the return filed by a person.

Secondary market transactions of Rs 10 lakh or more in a year, insurance premium of above Rs 1 lakh, debit card payments above Rs 2 lakh, fixed deposits and recurring deposits of over Rs 10 lakh each, and cash deposits of Rs 20 lakh in current accounts are likely to be added to the AIR list, which currently comprises eight items. High-value sales and purchases of property are taken as two items.

The implementation of the Direct Taxes Code appears set to miss its deadline once again.

The Direct Taxes Code (DTC) Bill, introduced in Parliament on August 30 last year, proposes to replace the 50-year-old Income Tax Act.

Initially proposed to come into force from April 2011, the code’s deadline had been extended to April 2012 as the draft Bill was referred to a Parliamentary standing committee.

Faced with sluggish industrial growth and its impact on revenue collections, the government today said it would step up “surveys” to maintain the tax buoyancy. 

“We are trying to maintain (tax) buoyancy by enhancing/strengthening the tax collecting machinery; by bringing more people through surveys and other information within the tax net...”, Finance Minister Pranab Mukherjee said in the Lok Sabha. 

The Punjab government today decided to provide much needed relief to the people of the state by not charging Value Added Tax (VAT) on the recently increased amount of diesel and LPG. 

With the exemption of VAT on the recently increased amount, diesel would become cheaper by approximately 25 paise per litre and LPG by Rs.2.50 per cylinder. To offset the price hike, the state government had given these concessions from its own resources benefiting the farmers, transporters and general consumers. With these concessions, the state government would lose about Rs 75 crore of revenue per annum.