The Income Tax Department is a government agency undertaking direct tax collection of the Government of India. It functions under the Department of Revenue of the Ministry of Finance.
Income Tax Department is headed by the apex body Central Board of Direct Taxes (CBDT). Main responsibility of IT Department is to enforce various direct tax laws, most important among these being the Income-tax Act, 1961, to collect revenue for Government of India. It also enforces other economic laws like the Benami Transactions (Prohibition) Act, 1988 and the Black Money Act, 2015.
The Income Tax Act, 1961 has wide scope and empowers ITD to levy tax on income of individuals, firms, companies, local authorities, societies, or other artificial juridical persons.
Therefore Income Tax Department influences businesses, professionals, NGOs, income earning citizens, and local authorities among others. The Act empowers Income Tax Department to tax international businesses and professionals and therefore ITD deals in all matters of Double Taxation Avoidance Agreements and various other aspects of international taxation such as Transfer pricing.
Combating tax evasion and tax avoidance practices is key duty of ITD to ensure constitutionally guided political economy. One measure to combat aggressive tax avoidance is General Anti Avoidance Rules (GAAR).
Central Board of Direct Taxes :
Functions and Organisation
The Central Board of Direct Taxes 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.
Historical Background of CBDT
The Central Board of Revenue as the apex body of the Department, charged with the administration of taxes, came into existence as a result of the Central Board of Revenue Act, 1924. Initially the Board was in charge of both direct and indirect taxes.
However, when the administration of taxes became too unwieldy for one Board to handle, the Board was split up into two, namely the Central Board of Direct Taxes (CBDT) and Central Board of Indirect Taxes and Customs (CBIC) with effect from 1.1.1964. This bifurcation was brought about by constitution of two Boards u/s 3 of the Central Board of Revenue Act, 1963.
Composition and Functions of CBDT
The Central Board of Direct Taxes consists of a Chairman and following six Members: –
2. Member (Income-tax)
3. Member (Legislation & Computerisation)
4. Member (Personnel & Vigilance)
5. Member (Investigation)
6. Member (Revenue)
7. Member (Audit & Judicial)
Chairman of CBDT :
IRS officer Pramod Chandra Mody is the Chairman of the Central Board of Direct Taxes (CBDT), the policy making body of the IT Department.
Mody, a 1982-batch Indian Revenue Service (Income Tax cadre) officer, has been appointed in place of Sushil Chandra, who was named as Election Commissioner.
The officer, who has worked in various capacities in the I-T Department, has been working as the Member (Administration) in the CBDT.
Designations in Income Tax Department :
Indian Revenue Service Cadre (IRS IT) Group A –
1. CBDT Chairman
3. CBDT Members
4. Principal Chief Commissioner of Income Tax
5. Chief Commissioner of Income Tax
6. Principal Commissioner of Income Tax
7. Commissioner of Income Tax
8. Additional of Income Tax
9. Joint Commissioner of Income Tax
10. Deputy Commissioner of Income Tax
11. Assistant Commissioner of income Tax
Group B –
12. Income Tax Officer
14. Administrative Officer
Group C –
15. Personal Secretary
16. Executive Assistants
17. Tax Assistant / Steno
Directorates under CBDT –
2. Legal and Research
8. International taxation
10. Intelligence and Criminals Investigation
Intelligence & Criminal Investigation Branch
In 1975, the Income Tax Department formed the Central Information Branch (CIB) for strengthening tax data-base. Initially, CIB operated under the supervision of DGsIT (Investigation). This was later brought under the Directorate of Income Tax (Intelligence) in June 2007.
As the world was changing very fast and India became increasingly integrated with foreign economies restrictions become more liberal for the movement of people.
The capital was flowing in and out of the country, new issues of tax evasion cropped up. However, there is an increasing pressure on financial institutions, tax heavens and the recalcitrant countries from all over the world to conform to new norms regarding exchange of information and greater transparency by the financial institutions.
In response to this changing scenario, in August 2011, a new directorate named as Directorate of IT (Intelligence & Criminal Investigation) was setup under a DGIT which included the erst while intelligence set up and CIB setup.
There are 18 field formations under this Directorate which include 09 DsIT (Intelligence & Criminal Investigation) at Ahmedabad, Chandigarh, Chennai, Delhi, Jaipur, Kolkata, Lucknow, Mumbai and Nagpur; and 09 DsIT (Intelligence) at Bangalore, Bhubaneswar, Bhopal, Guwahati, Hyderabad, Kochi, Kanpur, Pune, and Patna . Besides DIT (Administration) also functions directly under the DGIT at New Delhi.
Core Areas of Work:
The DCI is a nodal agency of IT Department for strengthening tax data- base. Its key function areas are
(i) widening of tax base through identification of stop filers and non-filers,
(ii) Deepening of tax base by providing information for proper selection of cases for scrutiny assessments,
(iii) through collection, collation of information from internal as well as external sources and its dissemination to Assessing officers (AOs) and other users in IT Department.
It also collects information relating to financial transactions like investment, expenses, payment of taxes, etc and details of persons who are involved in some specified activities. The mandate also provides for identification and investigation of cases of tax evasion arising out of criminal matters, having any financial implication punishable as an offence under any Direct Tax Law.
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