I-T dept not to scan small taxpayers, senior citizens

Small taxpayers and senior citizens will not have to live under constant fear of getting a tax-evasion notice. In an attempt to streamline the procedure of income-tax scrutiny, the income tax department has said that returns filed by small taxpayers and senior citizens will not be brought under the scanner without substantial information.

"The Central Board of Direct Taxes (CBDT) has reviewed its scrutiny selection procedure. In order to redress the grievance, it has been decided that during 2011-12, cases of senior citizens and small taxpayers, filing income tax returns in ITR-1 and ITR-2 will be subjected to scrutiny only where the income tax department is in possession of credible information," the CBDT said in a statement.

Senior citizens for this purpose would be individuals above 60 years. Small taxpayers would be individuals and Hindu undivided families whose gross total income before Chapter VIA deductions do not exceed Rs 10 lakh.

"It's a move in the right direction- both from the point of taxpayers and tax collectors. The tax department has limited resources. So, they want to focus on high-end tax recovery demands," says Vikas Vasal, executive director, KPMG India.