FM directive on current demand assessment

Finance Minister P Chidambaram today asked chief commissioners of income-tax to raise as much current demand from assessees as possible to ensure there were no slippages in the overall direct tax collection target for the current fiscal.

Chidambaram told reporters after a mid-year review meeting with 11 chief commissioners of major tax collection zones that there was no reason why the assessment of major assessees could not be computed in the current year itself. The revenue department has been asked to raise current demand where possible.

Current demand refers to the demand for payment of tax made by the revenue department on an assessee which is over and above the tax voluntarily paid by him. The demand is made in cases where the income of an assessee is found to be more than the declared income.

While expressing confidence that the direct tax collection would match the budget estimates, Chidambaram said some oil and coal companies were not paying much taxes. "One or two banks are also paying less. We will talk at the board level and we hope that they will pay," he said, adding that an advertisement campaign would be launched soon for collection of advance tax.

He said the department hoped to collect more by way of dividend distribution tax.

Commenting on the efforts made by the department to expand the database on assessees, he said, "There is greater compliance in tax deducted at source (TDS). I think that the message has gone that the department has more information than people think. This is due to annual information returns and banking cash transaction tax. We will use this information selectively. No one needs to worry".

When asked what the department was doing with the information, the minister said: "We have done quite a bit. We know the permanent account numbers. I believe letters have gone to several hundred thousand people. Can't tell you more about that. Whatever we have to tell the assessees, we will tell them."

Officials said the minister had asked chief commissioners in zones like Mumbai, which are facing a shortage in manpower, to use more funds to mobilise additional resources.