Income Tax Department

Taxation
An aspect of fiscal policy
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Collection Revenue service Revenue stamp Tax assessment Taxable income Tax lien Tax refund Tax shield Tax residence Tax preparation Tax investigation Tax shelter Private tax collection Tax farming
Noncompliance Tax avoidance Tax evasion Tax resistance Tax haven Smuggling Black market Transfer mispricing Unreported employment Tax shelter
Distribution Tax rate Progressive Regressive Proportional
Types Direct Indirect Per unit Ad valorem In rem Capital gains Carbon Consumption Dividend Ecotax Excise Fuel Georgist Gift Gross receipts Income Inheritance (estate) Land value Payroll Pigovian Property Sales Sin Single Stamp Steering Turnover Value-added (VAT) Corporate profit Excess profits Windfall profits Negative (income) Flat Wealth
International Financial transaction tax Currency transaction tax Tobin tax Spahn tax Tax equalization Tax treaty Permanent establishment Transfer pricing European Union FTT Foreign revenue rule
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The Income Tax Department, also referred to as IT Department, is a government agency in charge of monitoring the income tax collection by the Government of India. It functions under the Department of Revenue of the Ministry of Finance.^[2] It is responsible for administering following direct taxation acts passed by Parliament of India.^[3]

• The Income-tax Act, 1961
• Expenditure Tax Act, 1987
• Various Finance Acts (Passed Every Year in Budget Session)

The IT Department is also responsible for enforcing the Double Taxation Avoidance Agreements and deals with various aspects of international taxation such as Transfer pricing. Finance Act, 2012 seeks to grant Income Tax Department powers to combat aggressive Tax avoidance by enforcing General Anti Avoidance Rules.^[4]

Management

The Central Board of Direct Taxes (CBDT) is a part of Department of Revenue in the Ministry of Finance. The CBDT provides inputs for policy and planning of direct taxes in India, and is also responsible for administration of direct tax laws through the IT Department. The CBDT is a statutory authority functioning under the Central Board of Revenue Act, 1963. The officials of the Board in their ex officio capacity also function as a division of the Ministry dealing with matters relating to levy and collection of direct taxes. The CBDT is headed by Chairman and also comprises six members, all of whom are ex officio Special Secretary to the Government of India.

The Chairman and members of the CBDT are selected from the Indian Revenue Service (IRS), whose members constitute the top management of the IT Department. The Chairman and every member of CBDT are responsible for exercising supervisory control over definite areas of field offices of IT Department, known as Zones. Various functions and responsibilities of the CBDT are distributed amongst Chairman and six members, with only fundamental issues reserved for collective decision by the CBDT. The areas for collective decision by the CBDT include policy regarding discharge of statutory functions of the CBDT and of the Union Government under the various direct tax laws. They also include general policy relating to:

• Set up and structure of Income Tax Department;
• Methods and procedures of work of the CBDT;
• Measures for disposal of assessments, collection of taxes, prevention and detection of tax evasion and tax avoidance;
• Recruitment, training and all other matters relating to service conditions and career prospects of all personnel of the Income-tax Department;
• Laying down of targets and fixing of priorities for disposal of assessments and collection of taxes and other related matters;
• Write off of tax demand exceeding Rs.25 lakhs in each case;
• Policy regarding grant of rewards and appreciation certificates.

Any other matter, which the Chairman or any Member of the Board, with the approval of the Chairman, may refer for joint consideration of the Board.^[5]

Tax Recovery Officers

The powers of Tax Recovery Officers (TROs) were increased by Government of India in June 2016.^[6]

Anti Black Money Measures

The Finance Ministry instructed all revenue intelligence agencies to join the crackdown on forex traders, hawala operators and jewellers besides tracking movement of demonetised currency notes.^[7]

Income Tax departments raided various illegal tax-evasive businesses in Delhi, Mumbai, Chandigarh, Ludhiana and other cities that traded with demonetised currency.^[8] The Enforcement Directorate issued several FEMA notices to forex and gold traders.^[7] Large sum of cash in defunct notes were seized in different parts of the country.^{[9][10][11][12][13]} In Chhattisgarh liquid cash worth of ₹4.4 million (US$69,000) was seized.^[14]

• In 2016, December the Income Tax department,received more than 4000 emails, on black money holders, in India, within 3 days, when Income Tax Department, issued in public notice an email to report black money^[15]

Seizures of new Rs. 2000 notes

Huge amounts of cash in the form of new notes were seized all over the country after the demonetisation.^[16][17]

In December 2016, over 4 crore in new Rs. 2000 notes were seized from four persons in Bangalore,^[18][19][20] Rs 33 lakh in Rs. 2000 notes were recovered from Manish Sharma, an expelled BJP leader in West Bengal,^[21][22] and Rs. 1.5 crore was seized in Goa.^[23] 900 notes of the new Rs. 2000 denomination were seized from a BJP leader in Tamil Nadu.^[24] Around Rs. 10 crore in new notes were seized in Chennai.^[25]

As of 10 December, Rs. 242 crore in new notes had been seized.^[26]

It was noted in the media that while people were dying in queues to obtain a few thousand rupees in cash, persons with the right connections were able to amass crores of rupees in new notes, thus rendering the demonetisation exercise futile.^[26][27][28]

It was announced by the government that the seized notes will be brought into the mainstream as soon as possible to ease out the cash problem.

See also

• Income Tax Department Karnataka & Goa
• Central Excise (India)
• Union budget of India
• Value-added taxation in India
• Tax law
• Special Economic Zone
• Domestic tariff area
• Service Tax

References