Tax returns up to 16 years may be re-opened in matters relating to undisclosed income. The Government is likely to amend the Income Tax Act, 1961 which allows re-assessment of tax returns only up to six years.
“To verify older information and establish the money trail, it is necessary to have a provision for opening of older and older assessments,” a senior Income-Tax Department official said. Such a provision would help in getting information under the revised double taxation avoidance agreement (DTAA) with Switzerland, he added.
India and Switzerland have signed a revised treaty, which will enable sharing of information. The revised treaty will come into effect from January 1, 2012 for Switzerland and April 1, 2012 for India, and will be operational from the prospective date.
The official said that under the existing provisions, it was not possible to get details from the Swiss Authority about old transactions of running accounts in the Swiss Banks. “But if we get some old information domestically by reassessing the older returns, we can place a special request with the Swiss Government. We hope they will oblige,” he added.
A multi-agency committee, headed by the Chairman of the Central Board of Direct Taxes (CBDT), had also suggested that returns older than six years should be allowed to be re-opened. The committee was formed to suggest ways to check black money.
Meanwhile, the Income-Tax Department claimed that the rate of gross collection of direct taxes had exceeded the previous year's figure. ( See Table ).
“The surge in corporate TDS (tax deduction at source) helped us to achieve this. It also speaks of better resource management by corporates, except PSUs,” the official said.
Although the department is saddled with high refunds, the net income tax collection has turned positive. The department paid an estimated Rs 64,000 crore during the first six months of the current fiscal.
Though the rate of growth of net collections is lower than the previous year, the department is hopeful of overshooting the target. The Finance Ministry has internally revised the target of direct tax collection of Rs 5.33 lakh crore by 10 per cent.