It is rare that the middle class compels the government to review a decision especially when revenue dips, exports miss the target and the reality of grandiose schemes like the Bullet Train and a Mountain Corps against China begins to bite. But the unthinkable has happened and the government announced putting on hold all proposed changes in income tax returns. Actually, the Central Board of Direct Taxes (CBDT) came out with a dozen changes but two especially riled the netizens who promptly dubbed it #taxterrorism. First, making it mandatory to record all foreign trips along with details about passport and source of money spent and second, disclosing all bank accounts, open and closed, along with details of deposits.
It helped that the net was abuzz with instances where the CBDT has tainted the Modi government’s avowedly industry-friendly image such as the $3.3 billion notice on Cairn for a transaction which took place eight years back and tax notices worth $6 billion on over 100 foreign institutional investors. Netizens also doubted the wisdom of seeking details of all bank accounts when most accounts are already linked to PAN cards and banks deduct tax on interest above Rs 10,000.
Fresh from a visit to Europe and Canada where Modi strained every nerve to convince their businessmen about his intention to create investor-friendly conditions, this attempt to increase paperwork would have indicated the opposite. There were convincing counter arguments such as asking why the disclosure of bank accounts was so offensive and what was the harm in informing the government about foreign trips? But those who ridiculed the logic behind seeking personal expenditure on foreign trips as long as income is properly taxed won the day. However, it is not clear whether other changes that escaped the self-absorbed netizens such as obviating the need to send paper acknowledgement by post could also be axed. But if changes are inevitable as the government goes after black money to boost its coffers, it must fill the vacancies in the Income Tax Department so that the fat cats escaping the dragnet can be tracked down.