Standard Definition of certain terms relating to Income Tax

Report of the Committee for recommending standard definition of certain commonly used terms relating to direct tax administration

F. No. 309/11/2016 – OT

Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

*****************

New Delhi, dated 22nd April, 2016

Office Memorandum

Sub: Report of the Committee for recommending standard definition of certain terms.

A Committee was constituted by the Board, vide OM of even number dated 22nd January 2016, under the chairmanship of Shri Avadhesh Kumar Mishra, CIT (TDS)-2, Delhi to recommend standard definitions of certain commonly used terms relating to direct tax administration, such as “taxpayer”, “tax – base”, “new assessee/taxpayer”, “stop-filer/non-filer” etc.

2. The Committee deliberated upon the prevalent definitions/usage of these terms in the context of functioning of the Income Tax Department and also in the light of statutory provisions. After discussions, the Committee recommended that the following definitions of these terms be adopted for the purpose of generating relevant statistics, as also for reporting to Parliamentary Committees and various outside agencies:-

2.1 To be defined with reference to a given Financial Year:-

I. Tax-base – As on the first date of a Financial Year – Number of persons who have either filed ITRs, or in whose case tax has been paid, or deducted/collected (TDS/TCS), in any of the three consecutive financial years previous to the financial year under reference;

II. New taxpayer added – during a Financial Year- Number of persons who are not included in the tax-base, as on first date of the Financial Year, but who have either filed ITRs, or in whose case tax has been paid, or deducted/collected (TDS/TCS), for the first time, during the financial year under reference;

III. Taxpayer – for a Financial Year – Any person who has either filed a return of income or in whose case tax has been paid or deducted or collected at source during the financial year under reference.

IV. Potential taxpayer – for a Financial year – Any person who is not included in the tax-base, as on the first date of the Financial Year, but in whose case information is available on record to indicate that such person was liable to file ITR, or pay any tax, or tax was required to be deducted/collected (TDS/TCS) in respect of such person, during the financial year under reference;

2.2. To be defined with reference to a given Assessment Year:-

I. Assessee:- for a given Assessment Year – As per the definition provided in the Income Tax Act, including any person who is liable to pay any tax, or in respect of whom any proceedings is pending under the Act, for the reference assessment year;

II. Non – filer – for a given Assessment Year – Any person who is liable to pay any tax, or file an ITR for the reference assessment year, as per information available on record, but no such ITR for the relevant assessment year has been entered on the System.

3 In the context of above definitions, the words “tax paid’ includes taxes paid by way of Advance Tax, Self-Assessment Tax, Taxes deducted/collected at source (TDS/TCS), Tax paid against regular assessment, Dividend Distribution Tax etc.

3.1 Further, the words “information available on record’ in the above definition would include information received from departmental sources, third parties e.g. banks, financial intermediaries, law enforcement agencies, foreign tax authorities, etc. and information available in public domain.

4. The recommendations of the Committee have since been accepted by the CBDT with the directions that these standard definitions of the above terms should henceforth be adopted for data generation and reporting purpose.

(Salil Mishra)

Director (OT& WT)

Download Revenue Department OM F. No. 309/11/2016 – OT dated 22.04.2016