Indian Income Tax Department Facing New Challenges, Finance Minister Suggests

by Lorys Charalambous, Tax-News.com, Cyprus

05 February 2009

Speaking on Wednesday as the Indian Income Tax Department launched a new publication on best practices, Minister of State for Finance, S S Palanimanickam warned that the tax authority will need to gear up to meet new challenges as tax minimisation techniques become more sophisticated.

The book, entitled 'Let us Share' was launched at a public function in New Delhi.

Explaining the reasoning behind its publication, the Income Tax Department, in a statement, revealed that:

"'Let us Share', which began as an exercise for managing knowledge within the ITD as part of its institutional memory, has now been made public. The idea to share its practices and orders with the public is a testimony to the commitment for openness and transparency with which the department seeks to function."

Congratulating the Income Tax Department on its tax collection performance last year, and observing that direct tax collection in 2008 exceeded indirect tax collection for the first time, Palanimanickam went on to emphasize that in order to minimise tax evasion, the Income Tax Department has to demonstrate its capacity to reach more "tax evaders".

The Department must ensure that the right amount of tax is paid by all and opportunities for evasion are blocked, and that "the honest taxpayer is treated with all the courtesy that he rightfully deserves", the Minister added.

A new public relations website was also launched by the Income Tax Department on Wednesday, providing the latest publications in the taxpayer-education series on the filing of tax returns, taxation of salaries, valuation of perquisites, computation of house property income and capital gains, and other resources deemed likely to be useful for taxpayers.

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