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The government today said that it is open to out-of-court settlement with <keyword id="15492" type="CITY" weightage="80" keywordseo="Vodafone">Vodafone</keyword> and Cairn on tax cases, where the arbitration process has been initiated. 
 "As far as out of court settlement for Vodafone is concerned we have always said that we are prepared to discuss with friends and colleagues in Vodafone in good faith as to whether it might be possible to get to negotiated settlement we are always open to those discussions," Minister of State for Finance <keyword id="6357677" type="PERSON" weightage="80" keywordseo="Jayant-Sinha">Jayant Sinha</keyword> said. 
 
Foreign investors like Vodafone have dragged government to arbitration over a Rs 20,000 crore tax dispute arising out of retrospective applicability of the tax law. 
 British oil explorer <keyword id="128650" type="COMPANY" weightage="80" keywordseo="Cairn-Energy">Cairn Energy</keyword> plc has also initiated a similar move over Rs 10,247 crore tax liability due to the same reason. 
 
The basic tax demand for Vodafone was Rs 7,990 crore but the total outstanding, including interest and penalty, is estimated to have risen to Rs 20,000 crore. 
 
While both the central government and Vodafone have named their arbitrators, they have not yet been able to agree on a third arbitrator to preside over the proceedings. 
 
The case relates to the retrospective amendment of the I-T laws carried out by the UPA government in 2012 to overturn the Supreme Court verdict, which had favoured Vodafone. 
 
Cairn had in April named former Bulgarian minister and lawyer Stanimir A Alexandrov as its arbitrator in the matter. India on its part has said it would soon appoint an arbitrator in the tax dispute. 
 Asked if the government is considering out-of-court settlement for Vodafone, CBDT Chairperson <keyword id="2573203" type="PERSON" weightage="80" keywordseo="Anita-Kapur">Anita Kapur</keyword> told PTI, the government is always in the favour of reducing litigation. 
 
"We will have to wait for some developments. The government is always open to reduce litigation dispute by whatever ways it is possible." 
Sinha also said that the most comprehensive efforts to reduce litigation is by elimination of exemptions and reducing corporate tax rates. 
 
"The other thing that we have underway is simplification of the tax code...so whether it is through cleaning up or streamlining exemptions, whether it is simplifying the tax code, we are absolutely trying to reduce the amount of litigation that is in the system right now," he said. 
 
"Our goal is to ensure that our tax system is fair, it's simple, it's predictable... Our endeavor with respect to all these specific cases is that we always we will attempt in all good faith to try and settle them. That remains our consistent principle for these specific cases," he added. 
 
Image credit: Indiatimes

Government open to out-of-court settlement with Vodafone and Cairn on tax cases

The <a href="http://www.businessinsider.in/searchresult.cms?query=CBDT">Central Board Of Direct Taxation (CBDT) </a>is now planning to provide pre-filled forms for the purpose of <a href="http://www.businessinsider.in/searchresult.cms?query=Income+Tax+Returns">Income Tax Returns (ITRs)</a>. With this ‘pre-filled’ feature, the user’s data on income and other vitals will automatically reflect on the website. 
 
 
The apex policy-making body of the Income Tax department is aggressively working on the project and is planning to launch it in the next financial year. 
 The customer-friendly measure has come in the backdrops of the new e-filing system – introduced in August – which allows online <keyword id="6374875" type="ORGANIZATION" weightage="20" keywordseo="ITR">ITR</keyword> verification; all that you need is a valid Aadhaar number, internet banking, ATM among others. 
 
Taxpayers who have an income of less than Rs 5 lakh and without claims of refund can now generate an electronic verification code on the e-filing website of the tax department, which is later sent to their registered email to e-verify the return. 
 Anita Kapur, <keyword id="128665" type="ORGANIZATION" weightage="20" keywordseo="CBDT">CBDT</keyword> Chairperson said, "We are looking at a possibility of making more entries for a pre-filled form so that it becomes more easier for the taxpayer to file an e-return. We want to ensure that when technology moves, we can always bring in better facilities to make the life (of taxpayers) even easier." 
 
Kapur also said that these technology upgrades are proposed to be initially started for small taxpayers who file the one-page ITR (ITR 1) and the thinking in the department is that when the data of income as per previous records is automatically uploaded, then the taxpayer can file their ITRs quickly and wherever there are any amendments or changes, those can be corrected by the taxpayer himself. 
 
She also ensured that taxpayers will be able to change and correct their figures in the new system. 
Image: thinkstock

Soon your Income Tax form will come pre-filled

The Central Board of <keyword id="57161" type="CITY" weightage="80" keywordseo="Direct-Taxes">Direct Taxes</keyword> (<keyword id="128665" type="ORGANIZATION" weightage="80" keywordseo="CBDT">CBDT</keyword>) is coming with a new data mining tool known as the <keyword id="6354751" type="COMPANY" weightage="20" keywordseo="Income-Tax">Income Tax</keyword> Business Application from next year. The application would allow assessing all PAN-based information about a taxpayer at one click. The application would be able to access financial transaction profiles easily, according to an Economic Times report. "The Income Tax Business Application, once ready, will vastly improve data mining and <keyword id="203465" type="TECHNOLOGY" weightage="80" keywordseo="business-intelligence">business intelligence</keyword> of the department and the taxman," CBDT chairperson Anita Kapur told reporters on Tuesday. 

	Kapur said: "It will be a robust database which will include all sorts of financial transactions data of an entity including human intelligence collected on a person or entity."
 

	This new "smart and intelligent" database will help data mining and will include all financial transactions of individuals and entities and help check evasion.
 

	The Tax department is looking to make the process of paying taxes simple and provide immediate redressal to tax payers for their problems, Kapur said. 
 

	She said the department is on a drive to widen the tax net. "If you do not take action against evaders, then the message going out is the tax department is allowing people who should be in the tax net to remain outside," she said. 
 

	The CBDT chairperson further said tax evasion is not only a menace, it also spoils the compliance culture because those who pay taxes feel the system is unfair. 
 "This (not catching the evader) will encourage a system where a person who is outside the tax system will continue to remain outside the tax system," Kapur said, adding that there was a large constituency that's not covered under the <keyword id="113666" type="UNKNOWN" weightage="80" keywordseo="tax-deduction-at-source">tax deduction at source</keyword> (TDS) regime like small traders. 
	(Image: Indiatimes)

CBDT’s new data mining tool to help check tax evasion

<keyword id="2829070" type="UNKNOWN" weightage="20" keywordseo="While-PM">While PM</keyword> Modi is inviting global companies to come and invest in India, the epic legal battle brewing between foreign portfolio investors (FPI) and Indian tax authorities is sending wrong signals outside the country—and is thus, putting India’s reputation as a foreign-investment-friendly nation at stake. 
 As per a news report by The Economic Times, five FPIs have teamed up to challenge the applicability of minimum alternate tax (MAT) to capital gains arising from trading in stocks and bonds. The FPIs plan to file a writ petition in the <keyword id="48485" type="ORGANIZATION" weightage="20" keywordseo="Bombay-high-court">Bombay High Court</keyword> on Thursday challenging the tax demand. 
 
ET could not ascertain the names of the five FPIs and the quantum of MAT demand. However, demands ranging from Rs 1 crore to Rs 50 crore have been raised by taxmen in draft assessment orders to FPIs at the end of last month. 
 <keyword id="231315" type="POSITION" weightage="20" keywordseo="Junior-finance-minister">Junior Finance Minister</keyword> <keyword id="6357677" type="PERSON" weightage="20" keywordseo="Jayant-Sinha">Jayant Sinha</keyword> has confirmed on written that 68 notices had been sent to FPIs for payment of Rs 602.83 crore towards MAT. 
 Earlier, in a statement that had caused considerable consternation, the <keyword id="6355261" type="POSITION" weightage="20" keywordseo="Finance-minister">finance minister</keyword> had said the government could potentially collect around Rs 40,000 crore from FPIs. 
 
The news report by the financial daily reads, the dispute, which has damaged India's international reputation, flared up when the I-T department started sending notices to FPIs about six months ago asking them to pay MAT for the financial year 2011-12. Many tax experts, ET spoke to said MAT cannot be applied to an entity that doesn't have a so-called permanent establishment in the country. 
 
By March 31, assessing officers had sent draft assessment orders to FPIs asking them to pay MAT. Subsequently, demands were raised for two more years — FY10 and FY11 — in the first week of April. Indian income-tax laws allow assessing officers to go back seven years in the hunt for previous taxes. 
 During a conference call last Wednesday, <keyword id="120753" type="POSITION" weightage="20" keywordseo="revenue-secretary">Revenue Secretary</keyword> <keyword id="6359111" type="PERSON" weightage="20" keywordseo="Shaktikanta-Das">Shaktikanta Das</keyword>, Central Board of Direct Taxes (CBDT) Chairperson Anita Kapur and <keyword id="141786" type="POSITION" weightage="20" keywordseo="Minister-of-State-for-Finance">Minister of State for Finance</keyword> Jayant Sinha told investors that MAT would not be levied on funds that have invested through countries such as <keyword id="6356662" type="COUNTRY" weightage="20" keywordseo="Singapore">Singapore</keyword> and Mauritius, with whom India has double-taxation avoidance agreements (DTAAs). 
 
A day later, CBDT issued a circular instructing tax officers that decisions should be taken in "...all cases of foreign institutional investors seeking treaty benefits under the provisions of respective DTAAs, decisions may be taken on such claims within one month from the date such claim is filed". Many tax experts have dubbed this order vague since it doesn't mention the word MAT or tell tax officers what action should be taken in this regard. 
 
(Image: Reuters)

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Government open to out-of-court settlement with Vodafone and Cairn on tax cases

BI India Bureau

Soon your Income Tax form will come pre-filled

BI India Bureau

CBDT’s new data mining tool to help check tax evasion

BI India Bureau

India’s reputation as foreign investment friendly nation at stake. Know why

BI India Bureau

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