IRS is hailed as crusaders against black money which is a potential threat to the nation’s security and national economic development.
It is the time to hail the guardians of India’s revenue! (Photo: India Today/Getty Images)
By Rajiv Tuli: Chanakya, in his acclaimed treatise on state-craft Arthashastra, expounded in the very first chapter the axiom, ‘Kosha Moolo Danda’, which means ‘revenue is the backbone of any nation’. He advises the king to start his day by getting reports on the three most important issues concerning the nation – defense, revenue and expenditures. The basic premise of Chanakya’s taxation doctrine is that the purpose of taxation should be to strengthen the nation-state so as to ensure public welfare, national security and national development. His advice still holds good in the modern nation-state where the importance of revenue through taxes is increasing day by day.
In India, like any other country, the government draws its income from two heads: tax revenue and non-tax revenue. Tax revenue has two components: direct tax which comprises Income Tax and Corporate Tax; and Indirect Taxes which has GST, Customs and other taxes. The Income Tax Department in India collects the direct taxes portion of the tax revenue for the government of India.
This regime of direct taxes is manned by a cadre of Indian Revenue Services (IRS). Most of these are highly technical, professional and tech-savvy cadre. However, the services rendered by the IRS in the nation-building hardly gets recognised. The work of an IRS officer is quite challenging and interesting. They are the earner of the nation-family. IRS recruits enter the cadre at Assistant Commissioner Level through the civil services examination.
An IRS officer’s job has three major aspects which include tax administration, tax collection and unearthing black money. The other duties of this decorated and coveted service include policy formation of direct taxes, investigation of various economic crimes, serving ministries concerned, revenue intelligence, and international bilateral/multilateral negotiations among others. Further, IRS officers are also invited to be part of many law enforcement and intelligence organizations, and also work for international organisations such as – International Monetary Fund (IMF), ED, World Bank etc.
IRS is hailed as crusaders against black money which is a potential threat to the nation’s security and national economic development. This way, they work for securing the national economy and also national security though imperceptibly.
The achievements of the ‘guardian of revenues’ manned by the IRS officers are numerous, yet are under projected. Unlike its sister custom services, which has a long history since the colonial era, Income Tax services led by IRS does not have a long history. It effectively came into being only after India got independence. So, it does not have much of the colonial and archaic institutions and rules. The Income Tax Act, which became effective on April 1, 1962, replaced the Indian Income Tax Act, 1922. The current income tax law is governed by the 1961 Act, which has 298 sections and four schedules.
IRS has a very small cadre. Yet, it is one of the most efficient and professional cadres. From a meager tax collection of Rs 1.05 lakh crore in FY 2003-04 to Rs 14.4 lakh crore in FY 2021-2022 is by no means less than a miracle. As per one study, after the faceless regime, the Income Tax department is the most tech-savvy and computerised departments of not only India but also among the top countries of the world, including developed economies.
India has one of the most robust tax buoyancy which is attributable to a large extent to the cadre and policy execution by the IRS. Over the last two decades, the IRS can boast of transforming a small tax base of India into one of the largest tax bases in the world with more and more tax-payers coming in the tax net.
The total number of people filing tax returns till July 31, 2022 for FY 2022-23 is about 5.83 crore which is more than the population of many developed nations. The speed and faceless processing of refund can help you get your refund within a month of return filed. Probably, this is the fastest processing of refund by any department in the world.
However, the most coveted aspect of the functioning of the IRS is to unearth black money which is done through a very interesting yet highly-secretive operation against the tax-evaders, popularly known as IT Raid. You might have seen the Bollywood blockbuster film Raid featuring Ajay Devgn. The movie showcases the devotion of the IRS officer and the perils at work when he fights with the rich and influential. The yeoman’s service the IRS has been rendering is incredible. If you look at the number of scams the IRS has unearthed, you will be amazed to evaluate the figures, the depth and the level of reach it has created.
To name a few, the Swiss bank accounts of HSBC, unearthing of Neera Radia scam, CWG scam, the Fodder scam, various cases of terror funding, the LTCG and various share market scams etc. This speaks volumes about the level of their professional approach and ace of investigations. The number of assets seized during various raids over financial years is mind-blowing.
IRS recruits are in high demand in other investigation agencies as well such as ED, FIU and various ministries. Interestingly, as per one study, the Income Tax department does not figure in the list of top seven corrupt departments. The current government ushered in an era of faceless assessment in 2020. This step has hit on the lumpen elements of the department and ushered in an era of serving tax payers, and honouring honest tax payers.
There are crazy ideas by a few so-called intellectuals, who in their quest for popularity, debate upon the ideas of reducing the powers of the IRS. It would be naive to even think of making the IRS powerless, which is the earning son of the nation, and accounts for 55 per cent of the total tax income of the government. If the nation has reached from a meager Rs 4000 (in 1947) crore to Rs 14 lakh crore, and from 97.75 per cent as the highest tax rate and 11 tax slabs, to 30 per cent as the highest rate and three slabs, we have come a long way since Independence. It is just on account of IRS, who worked tirelessly to safeguard the financial backbone of our nation. It is the time to hail the guardians of India’s revenue!
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