No more harassment of ordinary taxpayer: CBDT

Senior citizens and individual taxpayers whose gross total income does not exceed Rs10 lakh a year will now be spared the trouble of regular income tax scrutiny. 

Finance minister Pranab Mukherjee had promised as much in his budget speech, saying that salaried taxpayers will not be required to file returns if their employer has deducted tax appropriately and they do not have any other income. Now, the Central Board of Direct Taxes has moved to implement this measure.

Admitting that not only the prolonged procedure of the scrutiny but the selection of the same cases repeatedly had evoked concern from small taxpayers and senior citizens, the CBDT said in a statement, "Appreciating the concern of these taxpayers and with a view to mitigate their hardships, CBDT has reviewed its scrutiny selection procedure.

Senior citizens (over the age of 60) and small taxpayers filing returns on ITR-1 and ITR-2 will be subject to scrutiny only if the income tax department is in possession of credible information, it added. 

Selection of cases for scrutiny is also being streamlined to ensure that same cases do not figure year after year. The income tax department has undertaken intensive upgrade of its software and systems responsible for picking up cases for intensive scrutiny, the statement said.

The CBDT has already exempt taxpayers from personal attendance if they are selected for scrutiny on the basis of a transaction reported in the annual information return. They can provide written reply in this case.

At present, the department carries out scrutiny of up to 2 per cent of the total number of tax returns. The computer aided scrutiny selection (CASS) system selects the cases at random based on parameters based on intelligence and annual information return.

The move is seen as a small step to mitigate the bureaucratic stranglehold on ordinary lives; and it may have the unmentioned spinoff of freeing the taxman to pursue more important cases.
 
Perhaps the department will now stop treating honest taxpayers like criminals, and focus its resources on tracking the serious evaders like (alleged wheeler-dealer) Hasan Ali Khan.