India’s tax assessment is set for a major revamp. In order to improve ease of doing business and curb corruption, India plans to overhaul tax assessment process for top 500 companies. The measure, likely to be introduced in the federal budget in February, is in line with Prime Minister Narendra Modi’s endeavour to end black money menace and tax evasion in Asia’s third-largest economy.
The e-assessment system will require the information technology wing of the direct tax office to undergo a major revamp.
According to officials familiar with the development, the new measures will eliminate the need for all human interactions in the scrutiny of tax returns and will be replaced with an online system. In case more information is sought, the company’s response will not end with the same set of officials as it will be determined by an algorithm, eliminating discretion, they added.
India’s rank in ease of doing business
Among the 190 countries surveyed in World Bank’s Doing Business 2018 report, India saw the biggest rise in its ranking from 130 to 100. In ease of paying taxes, India ranked 119 out 190 countries. PM Modi wants the country to break into the top 50, boosting India’s attractiveness as an investment destination.
“The measure will help weed out corruption associated with posting of tax officials who often seek to be based in large cities especially Mumbai, home to the headquarters of most large Indian companies,” say officials.
I-T, Sebi crackdown on penny stocks
Tightening the noose around companies involved in tax evasion, the Income Tax department and market regulator SEBI have launched a crackdown on penny stocks following the details sent by the Prime Minister’s Office (PMO) about 80 scrips, said a report.
The I-T department and Securities and Exchange Board of India are working on a two-pronged approach that involves action against tax evaders and tightening of norms for scrips prone to price manipulation, the report on Moneycontrol said.
The PMO has reportedly apprised the Central Board of Direct Taxes (CBDT) of 80 scrips earlier this month.
Citing sources, the report said, action has already been taken against 18 of the Maharashtra-based penny stock companies. Some of these firms were already under the I-T department’s scanner in the cases related to the Income Declaration Scheme.