Govt may extend period of reopening of IT returns to 16 yrs

Taxes | admin | October 20, 2011 at 9:32 am

The government may allow taxmen to dig into income tax filings of past 16 years of suspected assessees, a move aimed at strengthening the mechanism to investigate black money cases.

"The CBDT ( Central Board of Direct Taxes) Chairman headed committee is of the view that the period to reopen past tax assessment could be increased to 16 years…," a Finance Ministry official said.

The present Income Tax Act allows taxmen to reopen tax returns of past six years only.

The Government in May had set up a high-level panel to examine ways to strengthen laws to curb generation of black money, its illegal transfer abroad and its recovery.

While the panel is not in favour of any major changes in the existing laws, it is of the opinion that the period should be increased.

It is expected to make a formal recommendation in this regard along with other suggestions by November to the Finance Ministry.

The official said extension of the period of reopening returns is aimed at empowering tax officials to go deeper in the income and expenditure details of suspected persons and firms.

After the first meeting in June, the panel had sought public comments to deal with the problem of black money.

Members of the committee are from CBDT, Legislation and Computerisation (L&C), Director of the Enforcement Directorate, Director General of the Directorate of Revenue Intelligence (DRI), Director General (Currency), and Financial Intelligence Unit – India (FIU-IND), all wings of the Finance Ministry.

Cornered on the issue of black money, both by the Opposition and civil society, the Government has adopted a five-pronged strategy which includes negotiation and re-negotiation of tax treaties with various countries to deal with the menace.

Source: Economic Times