Wake-up call
 Income Tax System.
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Annexure 9-4



  1. IMPLEMENTATION (not required for transactions below Rs. 25,000)
    Outlines: The proposed implementation/control system revolves around under mentioned tools and implements:

    1.1.   Creation of “Transaction Voucher” data and creation of desired reports.

    1.2.   Transaction Vouchers preparation and filing in quadruplicate to be customary
             practice to ensure compliance with the proposed tax system.

    1.3.    Multiple level compliance and verification of the “Transaction Voucher” data and
              creation of desired reports.

    1.4.    Supplementary inputs for reconfirmation of transaction vouchers data from
              bankers, financial channels and other entities.

    1.5.    Advanced software/systems to be employed for creating individual records and
              creating variance reports besides generation of flags in respect of violations.

    • Creation of a Tax Cell equipped with on-line computerized data processing and automatically generated variance reports as well as flagged violations to initiate necessary actions as and when required.

    1.6.    Police functionaries to have authority to check Tokens and report status to tax
              authorities whenever required.

    1.7.    Citizens to be encouraged to report suspected Token violating to tax
              authorities on voluntary basis.

  2. Transaction Voucher: To consist of four copies (White, Green, Red and Blue).

    2.1.    Issued By:____________NIC____________NTN/Token No__________

    2.2.    Issued To:____________NIC____________NTN/Token No__________

    2.3.    Distribution:

              White Copy: Issuer

              Green Copy: Receiver

              Red Copy : To be signed and mailed directly to Tax Authorities by Issuer.
              Blue Copy : To be signed and mailed directly to Tax Authorities by

    2..4.   Issuer/Receiver to have option to either directly mail red/blue copies after
              signing or electronically submit the same using their NTN/Token numbers and

    2.5.    Corporate entities may use NTN number if Token number is not assigned to
  3. Multiple Transaction Vouchers:
    Transactions undertaken at multiple levels shall use more than one set of “Transaction Vouchers”. For example:

    3.1.    Commodity imported by a corporate body.
    3.2.    Commodity handed over to whole sale dealers.
    3.3.    Commodity sold to retailers.
    3.4.    Commodity sold to consumers.

    In this case first “Transaction Voucher” shall be issued by the Corporate body, second by the whole sole Dealer and third by the Retailer.
  4. Transaction Voucher Authentication:
    The data received through “Transaction Vouchers” shall undergo under mention authentication and data logging routine.

    4.1.    Downward Verification:
              Records based on “Red” copy to constitute “Downward” authentication.
    4.2.    Upward verification:
              Records based on “Blue” copy to constitute upward authentication.
    4.3.    Supplementary data to be obtained from record of financial transactions under
              Token using following tools/implements:
  • Cheque/bank draft/pay order payments.
  • Funds Transfer through bank advises.
  • Money Order transfers.
  • Real state transactions/transfers.
  • House rental records.
  • Vehicle sales/transfer records.
  • Bank Loan disbursements, repayments and write off records.
  • Stock Exchange transaction records.
  • Hospital Records.
  • School Records.
  • Airlines Records.
  • Hotels/Restaurants Records.
  • L C Records.
  • Record of repeated transactions of below Rs. 25,000 aimed at bifurcating large dealings into multiples of smaller denominations.
  • Others.
  • Overseas inputs wherever available.
  1. Transaction Voucher Analysis:
    Advanced software/hardware combination equipped with data analysis and stimulation models based on (1 out of 2), (2 out of 3) or (3 out of 4) techniques besides any other simulation techniques may be used to create variance reports and generation of flags.
  2. Violation Investigations:
    Tax authorities shall undertake detailed evaluation of violations and impose penalties as applicable. The legal procedures shall also be initiated and contested b y tax authorities wherever in order.
  3. Violation Publicity:
    All confirmed violations shall be publicized using routine media channels firmly identifying violators.



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