Income Tax Dept Going Into New Areas To Check Tax Evasion: CBDT Chairman Nitin Gupta

The CBDT undertakes search and seizure operations to check instances of tax evasion apart from performing its regular task of collecting revenue for the government under the direct taxes category

CBDT chief Nitin Gupta said India was also getting ‘large’ data through the common reporting standard and foreign account tax compliance act regime from various countries apart from several global tax leaks on Indians holding assets abroad.

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The Income Tax (I-T) department is going into 'new areas' of the economy to check tax evasion even as its vigilance units are using analytics to sift through voluminous data on Indians holding assets abroad, CBDT Chairman Nitin Gupta said on Friday, the PTI reported.

The Central Board of Direct Taxes (CBDT), the administrative body for the tax department, undertakes search and seizure operations to check instances of tax evasion apart from performing its regular task of collecting revenue for the government under the direct taxes category.

On his key focus areas, Gupta, who took charge as the CBDT chief in June-end, said some ‘pressing human resource’ issues, including timely promotions and getting right work avenues for the officers and staff of the I-T department and ensuring better taxpayer services, are his targets.

“We are covering a variety of sectors of the economy (while undertaking searches and raids). We are not limiting ourselves to real estate or developers only...our action is spread across sections of economy right from health care to pharma to developers to industries, manufacturers, service providers etc. We are touching new areas and various sectors of the economy which were never touched like asset reconstruction companies, gaming, betting etc.,” Gupta said, while adding, “I can say that our spread is very comprehensive.”

The CBDT chief said India was also getting ‘large’ data through the CRS (common reporting standard) and FATCA (foreign account tax compliance act) regime from various countries apart from several global tax leaks on Indians holding assets abroad.

While the CRS is a global uniform standard for automatic exchange of financial account information, FATCA is a tax information reporting regime between India and the US which requires financial institutions to identify their US accounts through enhanced due diligence reviews and report them periodically with each other.

“We have got information thorough Panama, Paradise and Pandora Papers (global tax data leaks of asset holding by various individuals and entities) and while they are limited number of cases, we are ‘populating’ this information into the CRS and FATCA to cull out data for our use,” the CBDT chairman said.

All this data, received till 2019, is under examination by the department's investigation units. "We are using data analytics and risk analysis to identify which cases can be more potential for the purpose of investigation," Gupta said. He said the data shared by foreign jurisdictions as part of mutual tax cooperation is huge and the tax department has to sift through them to find actionable cases.
The process takes time as it involves many layers of analysis as sometimes the individuals are just identified with initials and in many cases they are non-residents, he said.

Talking about the new faceless regime of taxation, Gupta asserted that the department's endeavour was to ease things for taxpayers or assesses. "The taxpayer is our key stakeholder, they are the centrepiece and with them in mind, we have issued some SOPs recently (for faceless scheme) for compliance by our officers. There could be system glitches and we are working to improve the processes which can be beneficial to the taxpayer and meet their aspirations. Our endeavour is unflinching and we are consistently working on it," he said.

The CBDT, early this month, issued a set of internal guidelines or standard operating procedures for IT department assessing officers in order to reduce ‘procedural errors’ and streamlining of the faceless assessment system for the taxpayer.

According to the data, the department has completed over 2.8 lakh cases under the faceless assessment scheme (FAS) launched by the government in 2019-20.