CBDT SAYS NO TO ONE TIME INTEREST WAIVER

In what could turn out to be a major tax initiative the Union Finance Minister P Chidambaram has proposed a one-time waiver for those who have not filed their returns nor paid taxes. But the Central Board of Direct Taxes (CBDT) is in no mood to listen, as top brass have tossed the proposal back to the finance minister.CBDT has stated that it will hurt the existing tax base and it is now upon the finance minister to decide whether an amnesty of this kind is feasible. The tax collection is booming and the finance minister is in a mood to experiment to expand the listed taxpayers base by offering a one time amnesty to those not paying taxes and not filing tax returns until now, finance ministry officials have told NDTV.The CBDT has met more than once in the last few months to examine the FM's request.But it seems the finance minister’s own taxmen are not so sure it is a good idea. CBDT says an interest waiver sets a wrong precedent. Also taxmen say that this will also require amendment in the income tax act.There is a one per cent interest penalty on late filing of tax returns and non or deferred payment of taxes. ''I do not think amendment to the act is logical. It could be more in the shape of a VDIS just the way he did in the year 1997,'' says Divya Baweja, Partner, BMR & Associates.CBDT is going more by the ethics than logic but it is the finance minister who will have the final word. Tax compliance may have improved significantly but there is space for a lot more to be done. For instance on the last count there are 45 lakh taxpayers on government records who have stopped filing returns. If the FM makes up his mind this initiative could even come up as a budget proposal – www.ndtvprofit.com