‘Direct tax mopup to cross Rs 3,00,000 cr this fiscal’

‘Direct tax mopup to cross Rs 3,00,000 cr this fiscal’

It was his first day as the chairman of Central Board of Direct Taxes (CBDT). After two rounds of meetings with officials and clearing of nearly 100 files,R Prasad, a 1970 batch revenue service official and alumnus of IIT-Kharagpur, caught up with ET on the very first day of assuming office as CBDT’s chairman. He said, his first target would be to raise the total direct tax collection beyond Rs 300,000 cr.
Excerpts:

R Prasad,
Chairman, CBDT

What are your top priorities after taking over as the chairman of CBDT?

My topmost priority will be to increase the total collection of direct taxes during the current financial year. We have already achieved 50% of Rs 2,67,000 cr target this year. We feel, we can go beyond Rs 300,000 cr. Till today (November 7, 2007), our collection is 44% more than what we collected during the same period last year. Targets are not pure mathematics, yet we can safely assume that our collection will be more than Rs 3,00,000 cr this fiscal.

Any other target that you have set aside for yourself as the chairman?

I would like to improve the tax administration. Also, we need to keep our men happy. That will bring in efficiency to the organisation. I will pay attention to many problems related to postings, deputation, training etc.

Shortage of manpower is a problem. Isn’t it?

We have around 60,000 people which may be further reduced to 57,500. Ideally, we need 70,000 to 80,000 staff. However, computerisation of our systems is a big help in this regard. Also, the CBDT’s total expenditure is just 0.56% of our total tax collection, which is much lower than the global benchmark of at least 1%. I also feel that we need to give our men a better exposure to the tax administration systems abroad. I would like to send some officials abroad for study tours.

In developed countries, TDS (tax deducted at source) forms a major chunk of the total tax collection. Are we also going towards that direction?

Yes, we will also try to collect more taxes through the TDS route. Good thing about TDS is that it does not take a toll on our manpower as others collect taxes for us. However, we need to educate various bodies including some state governments which have not collected TDS properly.

Have you noticed any discrepancies in TDS collections by state governments?

I won’t be able to name the states. But yes, some North Eastern states have deposited TDS recently which they collected five years back. It should be deposited in seven to 15 days from the time of collection. What’s more, they are at times deducting any amount, say just 2 to 3 percent. We have also come across instances where Panchayats have collected TDS, but have happily kept it with them. We need to make the accounting processes of the state governments and Panchayats more transparent.

Many tax payers have complained this year’s return is more complicated than the earlier Saral process. Do you agree that you have made the process a little more complicated?

People don’t appreciate changes in the system. But we needed to change it to make the system more efficient.

How is the response to e-filing?

The e-filing of returns has been a big hit. Till now, nearly 14,00,000 e-filings have been recorded, out of which about 11,50,000 are from individual tax payers. With computerisation, there’s no hassle of data entry, and the process will be much smoother.