It Dept Expects Windfall From 2c Tax Returns

With over 1,000 2C forms being filed in Delhi alone, the filing of tax returns under the economic criteria is the new buzz word in the income tax department after the Voluntary Disclosure of Income Scheme.

Under the new norms, any person who fits two out of the four criteria laid down by the government has to mandatorily file returns in a prescribed form. This form is known as 2C form. The criteria include ownership of car, house, telephone, apart from travel abroad during the previous financial year.

The scheme is aimed at the widening of the tax base to reflect the number of tax payers present in the system. But tax officials state that the scheme could prove to be a bonanza for the tax department with many of these assesses also paying the tax due from them.

 

The tax department is insisting on the filing of returns since many tax payers who are subject to tax deduction at source do not reveal the fact that they have other taxable income. When they are forced to file returns, they would be afraid to make a misdeclaration, revenue department sources said.

According to tax department sources, IT Delhi has opened additional counters, deployed more staff and allocated space for the scheme. The IT department in Delhi started by deploying two units to service assesses, but has now raised the number to eight units.

According to tax officials, if the momentum continues to build up as it did in the case of VDIS, it may have to put up pandals on the premises of the IT building, as it did during VDIS.

The tax department has been deluged by queries from assesses wanting to know if they fall within the ambit of the new regulation. The IT department recently resolved some of the doubts when it published the 2C forms in newspapers and clarified that in order to qualify for foreign travel criteria, the travel expense should be paid for by the assesse himself.

This has come as a major relief to several retired persons who may have children abroad and hence travel abroad regularly. However, if the tickets are paid for by their relatives abroad, such persons will not fall in the economic criteria.

According to tax officials, persons filing returns include government servants and others who are subject to tax deduction at source, retired persons, who have stopped filing their returns because their taxable income has fallen and others who have till now not been paying taxes and hence not filing returns.

Tax officials say that many declarants are coming forward to file returns on account of the fear that following computerisation, the tax department will have the requisite base to track down evaders. Others are queuing up because till now they were not aware that they had to file returns, irrespective of the fact that their taxable income is within the permitted exemption limits.