Tax evaders reel under Kelkar146;s TIN

The Tax Information Network became operational this year and the TIN effect is now being felt. This fiscal, between April 1 and September 17, around Rs 21,158 crore was collected as income tax, compared to Rs 12,534 crore last year, period on period 8212; an increase of 69 per cent.

Similarly, corporate tax collection increased 33 per cent while the total direct tax collection has risen from Rs 25,982 crore to Rs 38,364 crore this fiscal 8212; a jump of 48 per cent. And it is no accident. After all, TIN keeps tabs on direct taxes.

T. Koshy, senior vice-president, National Securities Depository Limited NSDL, which helped launch TIN, told The Indian Express, the new system was plugging all loopholes tax-dodgers would exploit.

In the paper regime, he said, companies deducted their employees8217; tax at source, deposited it in a bank and got a challan from the bank for the taxman. The bank did not know how much money was really collected from the employees, while the employees did not know whether the money deducted from their salaries had actually been deposited. And challans could be faked. 8216;8216;The bigger companies would submit tax documents by the truckload,8217;8217; said Koshy. 8216;8216;Forget cross-checking. Imagine how hard it was to check this8221;.

Starting July, banks have started giving out information on all their tax collections to a central database. This can electronically be cross-checked against information supplied by employers. Similarly, employers are submitting details about their tax deductions on CDs, including their employees8217; permanent account number PAN.

Everything can be reconciled and cross-checked electronically. The results are starting to tell. Next year, tax statements will be uploaded every quarter and examined more frequently. The smile on FM8217;s face will get wider.