Taxman’s long arm

Misplaced zeal is behind I-T’s note to CEC linking salaries of campaigning employees to poll funds

Written by The Indian Express | Published: February 23, 2012 12:22:56 am

Misplaced zeal is behind I-T’s note to CEC linking salaries of campaigning employees to poll funds

Jay Leno’s tax joke has a ring of universality: “Today is April 1,April Fools’ Day,a day that people try to fool their friends and relatives. Don’t confuse that with April 15,when people try to fool the IRS.” Well,across tax regimes,people do try to fool the taxman. But an apparently over-vigilant and hyper-active Department of Income Tax (I-T),or its Intelligence and Criminal Investigation wing,more precisely,has decided it will not be fooled even by moonlighting citizens.

What otherwise explains the unusual note sent last month by I-T to the Chief Election Commissioner,requesting “appropriate action” regarding employees of a private firm taking time off to campaign for Union Urban Development Minister Kamal Nath in 2009? Should such an employee’s salary,drawn for the period she was busy supposedly testing the power of her larynx,be treated as election expenditure incurred by the candidate? I-T believes it should,having gathered its evidence from the premises of M/s Raymond Limited in Nath’s Madhya Pradesh constituency,as part of a nationwide search of the firm’s premises. The EC’s legal adviser says this is “totally uncharted territory.”

Given the sound and fury about black money,and the easy belief fostered by some that ridiculously sweeping actions are the answer,the reason for I-T’s zealousness may not be hard to find. But just as a rational and wider tax regime,ensuring that few fool the taxman,would add immensely more to tax revenue,similarly,leaving the question of what constitutes campaign expenditure to the Election Commission is the most reasonable thing to do. And the CEC has this wisdom to offer: “When some employees or workers want to campaign in their voluntary capacity,what can be done about it?” Hope the taxman’s got the message.

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