Is the Tax Information Network a Good Idea?
Income tax department of India is leveraging technology to help them collect, monitor, and process taxes. The network is a central repository of information across the nation. It is established by the National Securities Depository Limited (NSDL) and provides access to government departments that have tax-related information. The purpose of the network is to prevent money laundering and black money and facilitate easy tax filing. But is the tax information network a good idea? Here are some reasons why you should use the network.
The TDS (Tax Deductions) Certificates will be generated from the Tax Information Network and are required for deductees to file their returns from April 1, 2011. Income Tax Department has adopted modern technology for collection and analysis. The revenue department has incorporated information technology in all aspects of tax collection, from the levying of taxes to auditing tax returns. This system has significantly increased compliance. In 2003-04, direct tax collections crossed Rs 1 lakh crore; by 2006-07, the amount had reached Rs 2.3 lakh crore. In 2008-09, net direct tax collections exceeded indirect tax collections.
Earlier, tax department employees filed annual returns in physical form, attaching supporting documents. There was a huge mountain of paper that was accumulated by income-tax department. With the help of the Tax Information Network, the process would be digitized, enabling smoother tax payments and refunds, and collecting information from bank branches. All of these benefits would increase the tax base of the Indian government, which, in turn, would lead to higher government revenues.