The Association of National Exchanges Members of India (ANMI) has urged the Ministry of Finance to reconsider the proposal for an e-campaign on voluntary compliance of income tax for FY19 amid practical difficulties to its members and investors. In a submission to the Central Board of Direct Taxes (CBDT), ANMI has said that the utility needs to be re-looked to make it meaningful and easy to respond.
The objective of the e-campaign is to facilitate taxpayers to validate online their tax and financial transaction information available with the IT department for FY19 and promote voluntary compliance, so that they do not get into the notice and scrutiny process.
Under this e-campaign, the IT department will contact identified taxpayers to verify their financial transactions related information received by them from various sources such as statement of financial transactions (SFT), tax deduction at source (TDS), tax collection at source (TCS) and foreign remittances (Form 15CC). The department has also collected information related to GST, exports, imports and transactions in securities, derivatives, commodities and mutual funds under information triangulation set up and data analytics.
In its submission, ANMI has said there was a need for clarity on submitting details on the portal. According to ANMI, there was no proper bifurcation and option to give reply on transactions. It said that there were thousands of entries for verification and response which required manual time. It is difficult and impractical to provide clarification for so many transactions. It said that it would be normal to show income on a consolidated basis.
ANMI pointed out that there were also many off market transactions relating to loans from directors and directors’ relatives and loan return. But there was no option on the portal to submit members’ responses on these transactions. It is of the view that the department was seeking several details which were impossible to match and included all shares given in margin to the stock exchange, shares taken as loan from shareholders, other sales done on the stock exchange and intraday trades. It said that in the current Covid situation, it was impossible for members to provide responses to the questions raised by the department.
It suggested that the utility should ideally capture the demat transactions only where taxpayers select the option “For Off-Market Sell/Purchase” instead of selecting all the transactions.
ANMI suggested that the department should also provide a downloading and uploading facility so that taxpayers could compile responses against each transaction and upload the responses. It also said that the utility should provide the demat and account details to identify the transactions of accounts.
ANMI has requested the ministry of finance that in view of the difficulties faced by the members, there was a need to re-look at the proposal for the e-campaign and make suitable changes so that they are able to provide the requisite details.
Credit: Stocks-Markets-Economic Times