Tax dept's felicitation of highest tax payers makes HNIs nervous
, ET Bureau|
Dec 13, 2017, 07.03 AM IST
For a Hyderabad-based senior executive at an MNC, last Friday was rather stressful: He was invited by the tax department to high tea, and he had other top income tax payers in the region for company.
The executive had nothing to hide from the revenue officers, but he was merely concerned about confidentiality of his tax data.
This new initiative by the revenue department has spooked several high net-worth individuals (HNIs), while some others are happy with the idea. With income-tax offices across India set to invite up to top 100 tax payers in their regions for felicitation, several of these individuals have red-flagged data-privacy.
"It's a good step by the government to felicitate highest income tax payers as this is aimed at motivating and encouraging those who honestly pay taxes. However, it should be done on a personal level by issuance of a certificate or award. Such felicitation should not become public information, since the taxpayers would want to keep their personal information confidential," said Rakesh Nangia, Managing Partner of Nangia and Co LLP.
The government had started taxpayer felicitation programmes in 2016. In its first year, the government had sent emails with different certificates of appreciation to taxpayers. Last year, taxpayers who earned between Rs 1 lakh and Rs 10 lakh were given bronze certificates, while those earning between Rs 10 lakh and Rs 50 lakh were given silver certificates.
Those who earned between Rs 50 lakh and Rs 1 crore annually were given gold certificates and all other HNIs who earned more than .`1 crore a year were given platinum certificates.
This time, however, some tax officials decided to go a step forward and organised a felicitation programme. Most of the tax commissioners across top 20 cities have something planned along these lines in the coming weeks.
Many of these tax payers are also requesting the revenue department to cancel such programmes or at least not announce names.
"While it's a good gesture by the tax department, it may not go down well with everyone. Some HNIs who are among top tax payers are concerned about their privacy and the confidentially aspects of their tax returns. Some of them in fact don't want their names to be highlighted by the tax department, fearing harassment," said Amit Maheshwari, Partner, Ashok Maheshwary & Associates LLP, Chartered Accountants. Many HNIs have also reached out to their tax advisors.
"I received a call from the tax department, inviting me to a felicitation programme. My only concern is that I don't want my income data to become public. I shared that data just with the government," an HNI, who has been asked to attend such a programme, wrote to his tax advisor, seeking advice.
Some officials hold a different view. "There is no question of confidentiality being breached. The department isn't sharing data with anyone. The government wants to encourage all tax payers and this is just one of the ways," said a government official in the know. According to government data, about 60 million PAN-card holders out of a total of 290 million file income-tax returns.
Every year, the names of highest tax payers are announced, although the list is limited to some Bollywood personalities and prominent businessmen.
Tax experts say that many HNIs keen to shun the limelight don't want the spotlight on them. "The RTI Act provides for an exemption in respect of disclosure of personal information, which has no relation to public interest or which may cause unwarranted invasion of privacy of an individual.
Information disclosed in the income tax return is confidential and should not be placed in public domain," said Nangia.
The executive had nothing to hide from the revenue officers, but he was merely concerned about confidentiality of his tax data.
This new initiative by the revenue department has spooked several high net-worth individuals (HNIs), while some others are happy with the idea. With income-tax offices across India set to invite up to top 100 tax payers in their regions for felicitation, several of these individuals have red-flagged data-privacy.
"It's a good step by the government to felicitate highest income tax payers as this is aimed at motivating and encouraging those who honestly pay taxes. However, it should be done on a personal level by issuance of a certificate or award. Such felicitation should not become public information, since the taxpayers would want to keep their personal information confidential," said Rakesh Nangia, Managing Partner of Nangia and Co LLP.
The government had started taxpayer felicitation programmes in 2016. In its first year, the government had sent emails with different certificates of appreciation to taxpayers. Last year, taxpayers who earned between Rs 1 lakh and Rs 10 lakh were given bronze certificates, while those earning between Rs 10 lakh and Rs 50 lakh were given silver certificates.
Those who earned between Rs 50 lakh and Rs 1 crore annually were given gold certificates and all other HNIs who earned more than .`1 crore a year were given platinum certificates.
This time, however, some tax officials decided to go a step forward and organised a felicitation programme. Most of the tax commissioners across top 20 cities have something planned along these lines in the coming weeks.
Many of these tax payers are also requesting the revenue department to cancel such programmes or at least not announce names.
"While it's a good gesture by the tax department, it may not go down well with everyone. Some HNIs who are among top tax payers are concerned about their privacy and the confidentially aspects of their tax returns. Some of them in fact don't want their names to be highlighted by the tax department, fearing harassment," said Amit Maheshwari, Partner, Ashok Maheshwary & Associates LLP, Chartered Accountants. Many HNIs have also reached out to their tax advisors.
"I received a call from the tax department, inviting me to a felicitation programme. My only concern is that I don't want my income data to become public. I shared that data just with the government," an HNI, who has been asked to attend such a programme, wrote to his tax advisor, seeking advice.
Some officials hold a different view. "There is no question of confidentiality being breached. The department isn't sharing data with anyone. The government wants to encourage all tax payers and this is just one of the ways," said a government official in the know. According to government data, about 60 million PAN-card holders out of a total of 290 million file income-tax returns.
Every year, the names of highest tax payers are announced, although the list is limited to some Bollywood personalities and prominent businessmen.
Tax experts say that many HNIs keen to shun the limelight don't want the spotlight on them. "The RTI Act provides for an exemption in respect of disclosure of personal information, which has no relation to public interest or which may cause unwarranted invasion of privacy of an individual.
Information disclosed in the income tax return is confidential and should not be placed in public domain," said Nangia.
