Give up the ‘total income concept' – Justice Rangarajan
Justice Rangarajan, former High Court Judge and ITAT Vice-President, in a mail to DDT, states,
The department is trying out hi-tech methods for tracking assessees. The USA has a system of gathering all the data from various sources and making a public profile of the assessee and sending it to the taxpayer.
If the taxpayer agrees he can pay tax according to that estimate or he can contest it with evidence. In a country like ours where only a small portion of all transactions are through electronic means, it will not be comprehensive. Still most of the banking and investment transactions are transparent. The problem is that those honest transactions of those who are mostly salaried class or senior and retired persons invite scrutiny and cause a lot of harassment.
The NRIs already have an option not to file a return if the investment income is taxed at source - see Section 115-I. My suggestion is to give up the total income concept and extend the benefit of section 115-I to all salaried class and senior citizens. This will reduce the routine work of the department to such an extent and same money spent on tax compliance that there can be better concentration on ferreting out concealed income.
If the concept of total income is to be retained, then the procedure of deducting tax at source by the payer should be substituted by requiring all assesses to route all receipts through a specified bank account and deduct tax from that account. This will also relieve the payers from the burden of deducting tax at source and save money.