TAX-PAYER FRIENDLY MEASURES

Filling of TCS returns on magnetic media

Under the existing provisions of sub-section (5A) of section 206C, the persons collecting tax in accordance with the provisions of selection 206C are required to file returns of tax collection at source.

The returns of tax collection contain voluminous data, and preparing these returns and then processing the data contained therein for checking its correctness requires substantial manual effort. The Bill proposes to provide the filling of these returns on magnetic media such as floppies, diskettes etc. as may be specified by the Board. It is also proposed that the information in such returns shall be admitted in evidence in any proceedings under the Act.

The proposed amendments will take effect from 1st June, 1999.[Clause 80]

Simplification of procedure of processing of return under sub-section (1) 143 and doing away of prima-facie adjustment

Under the existing provisions of Income-tax Act all the returns filed are processed under sub-section (1) for payment of tax and issue of refund. Certain powers are available with the Assessing Officer to rectify arithmetical mistakes and make prima-facie adjustments regarding allowable and disallowable claims and deduction. These are known as prima-facie adjustments. In addition to tax on income as a result of prima-facie adjustment, 20% of the tax is also levied as additional tax for making incorrect claims.

It is seen that the present system of prima-facie adjustment has become some sort of assessment in itself where every return is examined minutely and such adjustments are also open to appellate remedy. Most of the time of the Assessing Officer is utilised in processing the returns in the above manner leaving very little time for other important works. The ever-increasing number of returns also will make such processing of returns more time consuming. In view of the above it is proposed that the present provisions contained in sections 143 (1) or 143 (1A) or 143 (1B) are to be modified to do away with prima-facie adjustments, additional tax and issue of intimations in all cases. Filling the return by itself would complete the process of assessment limiting its scope to raise demand and issue refund on the basis of the return filed. Except for issuing intimations where any sum is payable by the assessee or refund is due to him, the acknowledgement shall be deemed to be an intimation. It is also proposed to amend section 154 of the Income-tax Act to provide for rectification of intimation or deemed intimation referred to in the proposed sub-section (1) of section 143. Similar amendments have also been proposed in the Wealth-tax Act.

The proposed amendment shall take effect from 1st day of June, 1999.[Clauses 64, 65 92 & 97]