Indian Banks To File Tax Returns From April 2004

by Lorys Charalambous, Tax-News.com, Cyprus

09 September 2003

The Indian Central Board of Direct Taxes is planning to make it compulsory for banks, stock exchanges and registrars of properties to file an information return on a yearly basis in a bid to reduce the potential for tax evasion and modernise the tax administration system.

"CBDT is trying to move away from invasive, discretion-based operation to a technical and transparent environment. CBDT will soon notify the entities which will be required to file annual information returns," a departmental official explained to the Indian Express, adding that the measures will only be aimed at the largest transactions.

The CBDT has already begun to collect a database of high value transactions undertaken by both individuals and corporate entities, which is likely to be maintained by the National Securities Depository Ltd (NDSL) according to local reports.

Recently, the income tax department also started operating a new electronic tax return system through six major banks including UTI Bank, HDFC Bank, IDBI Bank, ICICI Bank, Bharat Overseas Bank and Indian Overseas Bank. The scheme is initially operating in seven cities, but it is likely to be expanded in the future.

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