The Income Tax Department is a government agency in India responsible for administering and enforcing direct taxation laws, primarily the Income Tax Act of 1961. Its main functions include:
- Tax Collection: The Income Tax Department collects income tax from individuals, businesses, and other entities as per the provisions of the Income Tax Act.
- Assessment and Scrutiny: It assesses the income tax returns filed by taxpayers to ensure compliance with tax laws. This involves scrutinizing returns, verifying income, deductions, and exemptions claimed, and issuing notices for any discrepancies found.
- Issuance of Permanent Account Numbers (PAN): The Income Tax Department issues PAN cards, which are unique identification numbers assigned to taxpayers for various financial transactions.
- Taxpayer Assistance and Education: It provides assistance and guidance to taxpayers regarding tax laws, filing procedures, and compliance requirements. This includes conducting outreach programs, workshops, and seminars to promote taxpayer awareness.
- Investigation and Enforcement: The department conducts investigations and audits to detect tax evasion, black money, and other financial irregularities. It takes enforcement actions such as levying penalties, prosecuting offenders, and seizing assets in cases of tax evasion.
- Policy Formulation: The Income Tax Department assists the government in formulating tax policies and reforms to promote economic growth, equity, and fiscal sustainability.
Overall, the Income Tax Department plays a crucial role in mobilizing revenue for the government, ensuring tax compliance, and fostering a fair and transparent tax system in India.