PAN cards outnumber tax payers

A report says number of PAN cards far exceeds the number of tax payers. This raises concern that tax dodgers may be using multiple cards to hide income. The Income Tax ( I- T) department has issued close to 10 crore permanent account number ( PAN) cards but the number of taxpayers in the country is only one- third of this number, giving rise to serious concern that many tax dodgers are using two or more cards to conceal income.

According to the latest report of the Comptroller and Auditor General of India ( CAG), while 958 lakh PAN cards were issued till the end of March 2010 only 340.9 lakh tax returns were filed during 2009- 10.

A senior official told M AIL T ODAY that instances of assessees with two or more PAN cards have been detected which show that multiple cards are being used to hide income.

The PAN card allotted to a taxpayer is the unique identification number that helps track individual tax compliance. It has to be furnished for all major transactions and opening bank accounts so that the IT authorities can trace the money trail of assessees. " However, this prime purpose for which a PAN card is issued gets defeated if taxpayers get hold of more than one card," a senior official pointed out.

An I- T official confirmed that the department has now initiated the exercise to weed out duplicate PAN cards but it is will take a long time given the huge database that has to be sifted through.

According to sources, the I- T department is looking for similar names, residential addresses and identical dates of birth to detect such multiple cardholders and check tax evasion.

PAN cards are issued by the I- T department, but the front- end of the process has been outsourced to UTI Technology Services Ltd and the National Securities Depository Ltd since July 2003.

The CAG report points out that the Central Board of Direct Taxes ( CBDT) needs to identify the reasons for the huge gap between the number of PAN cards and the number of taxpayers who actually file returns. " The gap might be due to the issuance of duplicate PAN cards and death of some PAN card holders," it adds.

According to sources, the death of PAN card holders can account for only a small portion of this gap. " Some of the PAN card holders use them for establishing their identity and may genuinely not be required to pay tax. But there is a huge number of individuals who are misusing multiple PANs to dodge taxes," a senior official said. It is this category that the CAG wants the I- T department to crack down on so that tax evasion is checked and revenue collection gets a boost, a senior official said.

The report points out that the growth in direct tax revenue has not been keeping pace with the growth in gross domestic product ( GDP). The logic is that a higher GDP growth rate leads to higher incomes, which should translate into higher taxes.

However, this is not happening. The report said, for every unit of growth in the GDP, direct taxes grew from 1.7 per cent in 2005- 06 to 2.6 per cent in 2007- 08. However, this figure came down to 0.5 per cent and 0.8 per cent in 2008- 09 and 2009- 10, respectively. This sharp decline in tax buoyancy is a matter of concern, the report added.

Indian employees prepared to go overseas for right job: Survey

New Delhi, Mar 21 (PTI) As many as nine out of ten Indian employees surveyed are willing to move out for the right job, with people even ready to relocate to another country or continent, according to Kelly Services.

A survey by workforce solutions provider Kelly Services revealed that 89 per cent of Indian employees were willing to move out for the right job.

Of them, 49 per cent were prepared to relocate to another country or continent to get the job of their choice. About 39 per cent of the respondents were ready to move within the country, the survey, released today, said.

As per the findings, men are more willing to move out than women.

"In an environment where the market for talent is becoming global, there is a growing realisation that many individuals may have to relocate for work," Kelly Services'' Managing Director Kamal Karanth said.

Among the Indian jobseekers, 36 per cent preferred Europe as their favourite place for employment, followed by Asia Pacific (20 per cent), North America (19 per cent) and the Middle East (7 per cent).

"Oil & gas and hospitality sector witness maximum global relocation (81 per cent and 73 per cent, respectively)," the survey said.

The observations are based on a survey of about 2,000 people in India.

"... there is a diverse global demand that can present personal rewards and career opportunities for those willing to travel," Karanth said.

On the other hand, there are factors such as family and friends, cost of moving, language barries and cultural differences, that prevent many people from seeking jobs overseas.

PPF vs NSC: What's the difference?

PPF is for 15 years, but you can extend it for a block of five years. Let's say you open a PPF account when you are 21 years old. It matures when you are in your late 30s, when you may be earning well and may not need the money. In that case, you can continue with the account.
Of course, you do have the option of withdrawing the entire balance on maturity, that is, after 15 years of the close of the financial year in which you opened the account.
So, if you opened it in FY 2006-07 (this financial year), you will be able to withdraw it 15 years later, starting March 31, 2007 (end of this financial year). That is April 1, 2022.
If you extend it for five years after that, you continue to earn the rate of interest and can also make fresh deposits and get the tax benefit.
NSC is for a much shorter duration -- just six years from the date of investment.
How many can I have?
Once you open an NSC, you can't keep adding to it. You will have to buy another. Let's say you buy a NSC of Rs 30,000. In a year's time, you want to add another Rs 30,000. You cannot add it to this amount. You will have to buy another NSC.
With PPF, you can have just one account. But this does not matter because you have to make annual additions. Every year, you keep adding to it.
However, if you like the safety of the investment and a guaranteed return of 8% per annum, you can open one in your child's name.
So you can have one account for yourself and one for your child. But this does not mean the tax benefit is doubled. The limit is the same -- Rs 70,000, irrespective if it all goes in your account or in your account and your child's.
Let's say you open an account for your minor child. You can deposit Rs 70,000 in your account and Rs 70,000 in your child's account. But you will only get the tax benefit on Rs 70,000.
How is it held?
The PPF account cannot be held jointly. You can nominate someone but it cannot be jointly held with someone else.
With NSC, you can hold it jointly or you can hold it singly and nominate someone.
Where can I open it?
To open a PPF account, you can drop by a State Bank of India [ Get Quote ] branch. No, you do not have to have an account with them.
You can also ask your nationalised bank where you have an account if they are authorised to open PPF accounts. You can also approach the head post office in your area. If that is inconvenient, ask your local post office (selection grade sub post offices are allowed to do so).
To buy an NSC, just approach any post office.