Though the government has clarified that income-tax recovery officials have not been ordered to use the provisions of arrest and detention against wilful tax defaulters, it is expected that a year down the line recovery officials may be asked to do so. In European countries cases of wilful default are treated as the equivalent of cheating. The thinking is that the person has made money by evading taxes and so must face the consequences. Custodial interrogation is necessary and can help in investigation. It will also have a deterrent effect. However, even without the powers to arrest and detain, tax sleuths can use existing laws which give them enough statutory powers to take over properties of wilful defaulters. The list of wilful defaulters has 6,025 names and it should not be difficult to deal with them. The political will to collect the taxes must exist.
India’s new economy, like e-commerce and myriad on-line ventures, need to be brought into the tax net. Tax experts in these subjects would help if the base is to be widened from the measly two per cent that currently pay taxes. The captives are mostly salaried people who have their taxes deducted at source. Because of the laxness of the I-T authorities there is a huge army of non-filers which has grown over the years to 58.96 lakh in 2015. This is a conservative figure considering the number of millionaires spawned by the new economy.