Mumbai, Jan. 2: Knocking the doors of the income tax department for tax refunds and Permanent Account Numbers (PAN) may soon be a thing of the past, with the Central Board of Direct Taxes’ (CBDT) deciding to outsource the work from an external agency.
In all probability, the work of issuing PAN cards and tax refunds will be assigned to UTI Investor Services Ltd (UTI-ISL), the wholly-owned subsidiary of the Unit Trust of India.
“CBDT is primarily looking at us,” B. S. Pandit, CEO of UTI Investor Services told The Telegraph, declining to give more details. The main issue confounding the income tax department is the problem of plenty. After the government introduced novel methods to net new taxpayers like “Saral forms” and the ‘six-by-six,’ the number of tax assessees in the country have grown multi-fold.
The infrastructure available with tax departments has, however, failed to keep pace with the growing number of tax assessees despite computerisation. While the rate of allotment of PANs has accelerated over the years, there is still a huge backlog.
Out of the total 25 million returns submitted to the department in 2001-02, reports reveal that PAN has been allotted to about 20 million people.
The Kelkar committee on direct taxes has put a major emphasis on modernisation of the tax machinery to beef up revenue generation and reduce interface between taxpayers and the department.
IT analysts say the move is in line with the finance minister’s suggestion that interface between the taxpayer and the IT authorities be curtailed.
“We have the capability,” Pandit said, on being asked whether UTI-ISL could cope with the job. “We service nearly two crore investors of UTI, giving them regular updates and dividends, among other things,” he added.
UTI-ISL is in the process of restructuring itself into a business process outsourcing arm. A “letter of intent” is expected to be signed by the two entities in the coming weeks. UTI-ISL has 520 personnel handling the entire gamut of back office work for UTI. Recently, when Templeton took over Kothari Pioneer, the back-office work of Templeton’s international operations was outsourced from Kothari Pioneer.