Why the taxpayer must watch out as the new moves by Sitharaman look like double-edged swords.
Some taxpayer-friendly moves announced by Finance Minister Nirmala Sitharaman in her Budget speech look like double-edged swords.
One announcement she made indicated that you no longer need a PAN number to file your returns. An Aadhaar number will do. Aha, you think.
Buying a car, but no PAN? An Aadhaar will suffice.
But consider the other side of the coin. If an Aadhaar is just as good as a PAN, by implication Sitharaman has made more than one billion plus Aadhaar number owners potential targets for future taxes. If you buy a car with just an Aadhaar number, you will surely get the taxman excited. So watch out.
But more chilling is the Finance Minister's offer to help you make tax-filing a breeze.
Sitharaman said in her speech: "pre-filled tax returns will be made available to taxpayers which will contain details of salary income, capital gains from securities, bank interests, and dividends etc. and tax deductions. Information regarding these incomes will be collected from the concerned sources such as banks, stock exchanges, mutual funds, EPFO, state registration departments, etc. This will not only significantly reduce the time taken to file a tax return, but will also ensure accuracy of reporting of income and taxes."
Even today, it is possible to import basic details like salary and taxes into ITR-1, info that the income-tax department can obtain from the AS 26 statements. But you still need to calculate capital gains from your broker or mutual fund contract noted, and bank and dividend details from your bank transaction statements.
If Sitharaman's tax officials are going to pre-fill these details for you, it will certainly ease your tax filing efforts. But you should also know that your financial innards are known to the taxman in advance.
Big Sister's agents are watching you, beware.