I-T plans 3-pronged strategy to boost tax mop-up, base

Functional specialisation, jurisdiction-free assessment, taxpayer segmentation are three focus areas

Defaulted on your income tax payment? You may have to deal with at least three separate tax officers for verification of returns, assessment and, finally, recovery of dues. Besides, a Delhi-based taxpayer may receive a tax notice from an officer posted in, say, the Northeast, as part of sweeping changes being deliberated by the income-tax (I-T) department to boost revenue collection.

The department is working on a three-pronged strategy to improve tax collection and widen the tax base, which now stands at 55 million. The department has a steep tax collection target for the current financial year.

Functional specialisation, jurisdiction-free assessment and taxpayer segmentation are the three focus areas.

“Unconventional strategy is being worked on to increase the tax base and improve arrears recovery. We are working on three broad themes. A committee is studying feasibility and suggestions are still coming in,” an official said.

Through “functional specialisation” the tax department will attempt to split functions to enhance efficiency in the department in carrying out assessment, verification, raising demand, initiating recovery and pass orders. Now a single officer handles the entire process for a taxpayer.

“The idea is that specialised functions will improve efficiency. It is still being deliberated,” said another official.

Jurisdiction-free assessment will mean that any officer can send a notice to any taxpayer across the country. The move will check harassment of taxpayers and reduce corruption, as assessment will be done through email.

“You may be filing returns with an officer of your jurisdiction, but if your case comes up for scrutiny or you have a grievance, it may be handled by another officer,” said the official.

If an officer is overworked, another officer based anywhere can be assigned the assessment or any other function, according to the proposal.

The annual action plan of the income tax department includes litigation management, disposal of high-value cases, scaling up of searches and seizures, and strengthening of systems and investigation teams.

Besides, it is mulling “taxpayer segmentation”, for differential treatment for small and large taxpayers. For instance, tax officers may hold informal or formal meetings with big corporates every quarter to facilitate tax forecast and payment.

“The tax department should interact with big companies more often, discuss their quarterly results to facilitate tax filing and estimate earnings and thereby tax collection,” said an official. “The tax department is after all a 30 per cent stakeholder in their earnings.”

The income tax department has a steep collection target of Rs 9.8 lakh crore during 2017-18, rising 15.7 per cent from a year ago. The income tax rate on income between Rs 2.5 lakh and Rs 5 lakh was cut to 5 per cent from 10 per cent in this financial year.

There has been a 25 per cent increase in e-returns filed this year at 27.9 million, up from 22.3 million returns a year ago.

The systems and investigations teams have been strengthened in a major reshuffle two months ago that saw a shake-up of 315 officers. 

More people in systems will help in generating information for the investigation teams to act upon.

The new approach
 

• Functional specialisation: I-T dept will attempt to split the functions to enhance efficiency in carrying out assessment, verification, raise demand, initiate recovery, and pass orders

• Jurisdiction-free assessment: This will mean any officer can send a notice to any taxpayer across the country

• Taxpayer segmentation: Differential treatment for small and large taxpayers