The government has decided to provide the tax defaulters another chance to prove their loyalty to the IT department, by implementing a single time amnesty scheme
The Income Tax department has been at the centre of all action thanks to governments plans to revamp it. The revenues that the department earned have not been in line with the expected numbers, as the number of assesses registered with it are much more than the ones who are actually filing the returns.
This forced the government to consider serious changes in the structure of the entire department along with major modifications in the operational policies, which has reflected in the decisions that it has taken recently.
One important move that the government has decided to execute is the implementation of the amnesty scheme -- the Voluntary Compliance Encouragement Scheme. This scheme would allow the tax defaulters registered with the department, to declare their liabilities within a stipulated timeframe and escape the adverse results that are in store for them otherwise. The stipulated time period is the end of the month of December, and anyone who files his returns in line with his liabilities within this time frame would avoid penalties or penal proceedings.
The government has planned to increase the revenue of the I-T department from the indirect taxes, so as to increase efficiency and help accommodate better growth. The difficult economic conditions have not helped the cause. The authorities have promised strong action against those who fail to respond to the notices sent by the department and its concerned wings, irrespective of the magnitude of the irregularities.
The figures suggest that there is a gaping hole in what the government should receive and what it is receiving currently, which has fast tracked the revamping of the entire Income Tax section. The highest number of defaulters has been found in the service tax section, which makes it imperative for all the commercial institutions across the country, to respond to tax notices and declare their tax liabilities voluntarily.
The effect although yet to be measured, is expected to be significant, as the government has rarely taken such a strong stand. Also, digitisation of the operations of the department is expected to improve revenue generation significantly, as it would completely eliminate any irregularities in the calculation of the returns.
The implementation of the scheme would also prove to be highly beneficial for the consumer in the longer run, and this would be in addition to the immediate benefit of avoiding penalties and penal proceedings.
