Telephone may be taken out of one-by-six I-T scheme

Owning a telephone as one of the criteria under the one-by-six scheme for mandatory filing of Income Tax returns is likely to be withdrawn in the forthcoming Budget.

"Telephone is no longer a luxury item. Many people, who do not fall under the tax net, now have phone connections. Therefore, making it a criterion for filing tax returns only adds to paperwork," official sources said in New Delhi on Wednesday.

Under the one-by-six scheme, any person living in an urban area would have to mandatorily file IT returns if he possesses either a house, car, telephone, credit card and club membership and has travelled abroad during the year, even if he does not have taxable income.

Possessing a phone, however, was acting as a dampener to the increase of tele-density as many in rural areas did not take telephone connections fearing harassment from Income Tax departments, sources said.

The communication ministry, which has laid down a roadmap for increasing tele-density to 15 per thousand by 2011 from a meagre 2.5, had earlier asked Finance Minister Yashwant Sinha to take out telephone from the one-by-six scheme.

Currently there are as many as 25 million income tax assessees. But this fiscal, nearly 8 million of them have not filed returns. Apparently, many of them do not fall under the tax net.

There are also certain legal difficulties in enforcing the one-by-six formula as the law does not provide for any penalty for non-filing of returns to persons not having taxable income.

PTI

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