This is a perfect section for you if you are interested in enhancing your knowledge about Financial Matters. A few tips and tricks about Investing, Shares, Mutual Funds and Money Saving Schemes.
A report says number of PAN cards far exceeds the number of tax payers. This raises concern that tax dodgers may be using multiple cards to hide income. The Income Tax ( I- T) department has issued close to 10 crore permanent account number ( PAN) cards but the number of taxpayers in the country is only one- third of this number, giving rise to serious concern that many tax dodgers are using two or more cards to conceal income.

According to the latest report of the Comptroller and Auditor General of India ( CAG), while 958 lakh PAN cards were issued till the end of March 2010 only 340.9 lakh tax returns were filed during 2009- 10.

A senior official told M AIL T ODAY that instances of assessees with two or more PAN cards have been detected which show that multiple cards are being used to hide income.

The PAN card allotted to a taxpayer is the unique identification number that helps track individual tax compliance. It has to be furnished for all major transactions and opening bank accounts so that the IT authorities can trace the money trail of assessees. " However, this prime purpose for which a PAN card is issued gets defeated if taxpayers get hold of more than one card," a senior official pointed out.

An I- T official confirmed that the department has now initiated the exercise to weed out duplicate PAN cards but it is will take a long time given the huge database that has to be sifted through.

According to sources, the I- T department is looking for similar names, residential addresses and identical dates of birth to detect such multiple cardholders and check tax evasion.

PAN cards are issued by the I- T department, but the front- end of the process has been outsourced to UTI Technology Services Ltd and the National Securities Depository Ltd since July 2003.

The CAG report points out that the Central Board of Direct Taxes ( CBDT) needs to identify the reasons for the huge gap between the number of PAN cards and the number of taxpayers who actually file returns. " The gap might be due to the issuance of duplicate PAN cards and death of some PAN card holders," it adds.

According to sources, the death of PAN card holders can account for only a small portion of this gap. " Some of the PAN card holders use them for establishing their identity and may genuinely not be required to pay tax. But there is a huge number of individuals who are misusing multiple PANs to dodge taxes," a senior official said. It is this category that the CAG wants the I- T department to crack down on so that tax evasion is checked and revenue collection gets a boost, a senior official said.

The report points out that the growth in direct tax revenue has not been keeping pace with the growth in gross domestic product ( GDP). The logic is that a higher GDP growth rate leads to higher incomes, which should translate into higher taxes.

However, this is not happening. The report said, for every unit of growth in the GDP, direct taxes grew from 1.7 per cent in 2005- 06 to 2.6 per cent in 2007- 08. However, this figure came down to 0.5 per cent and 0.8 per cent in 2008- 09 and 2009- 10, respectively. This sharp decline in tax buoyancy is a matter of concern, the report added.
ADVERTISEMENT