The advisory Group on Tax Reforms under the Chairmanship of Dr. Vijay Kelkar had recommended networking of Income Tax Department,
Banks and Reserve Bank of India to facilitate On-line Transmission of details regarding tax collection/refund,
etc. between banks and offices of Income Tax Department and also RBI for settlement of funds.
To examine the various issues relating to implementation of the Kelkar Committee recommendations stated above, the RBI constituted
a High Power Committee in February 2003, under the Chairmanship of Shri B. Swarup, Member (Inv.), Central Board
of Direct Taxes (CBDT) to recommend suitable measures in this regard. Chairman, IBA was a Member of this Committee.
The High Power Committee under the aegis of the RBI constituted a Sub-Group on Business Processess Designing for the OLTAS,
under the Chairmanship of Shri C.B. Bhave, Managing Director, NSDL, Mumbai and Chief Executive, IBA as one of its
members. The Group recommended that a Single Copy Challan should be adopted for payment of taxes as recommended
by Kelkar Committee for simplifying the process for the tax payer. Accordingly, Single Copy Challan has been introduced
in place of 4 Copy Challans from 1st June 2004.
The High Power Committee constituted a Technical Sub-Committee, chaired by Shri R.N. Ramanathan, Dy. Managing Director (IT),
State Bank of India and with representatives from Income-tax Department (Systems), Controller of Accounts, CBDT,
RBI and IBA, to address all issues for conducting pilot studies on On-Line Tax Accounting System (OLTAS). The Technical
Sub-Committee held several meetings in the IBA and finalized the record structure and file format for the On-Line
Transmission of tax information from the collecting banks to the TIN (Tax Information Network at NSDL) and the
Income Tax Department. The Technical Committee also finalized the modalities for conducting pilot studies on OLTAS
and three pilots were launched between June 2003 and April 2004:-
Originally, the Pilot on OLTAS was confined only to the corporate tax payers, however, after 15th February 2004, the project
covered both corporate and individual tax payers and finally, from 1st June 2004, the Pilot went All-India, covering
all the authorized branches of the 32 participating banks all over the country.
Several measures were taken to ensure smooth operations under the OLTAS. A crack team was setup in the IBA with members from
CBDT, RBI, NSDL, SBI and banks for resolving problems immediately before and after the launch of the OLTAS project.
A central technical help desk was setup at every bank to attend quickly to technical problems at the bank level.
Additional arrangements for receipt of tax challans and help desks were setup at collecting branches to clarify
the queries that may be raised by the assesses at the branch level during peak time. Declared under the Mission
Mode, the OLTAS project is monitored at the highest levels.
Settlement of funds under OLTAS:
Originally, the OLTAS Project covered only the tax information data. The funds collected by the bank branches followed the
manual mode and was reconciled with the paper scrolls sent to the ZAO. However, from 1st April 2005, the OLTAS
Pilot Project was commercially rolled out and the settlement of funds was also migrated to on-line mode. Thus,
from 1st April 2005, the banks had to reconcile funds collected on a day to day basis with the electronic data
reported by banks to TIN.
With over 12000 branches reporting tax data, there were several issues related to quality of data being uploaded to TIN.
For overseeing all such issues, the High Powered Committee has constituted a Monitoring Group under the Chairmanship
of Member (Revenue), CBDT. The Committee meets regularly and addresses areas of concern. At its recent meeting
held on 30th January 2006, the Group discussed the following issues among others:
Of the 12000 total number of branches collecting taxes, 60 were found not to be reporting to TIN. These were found to be
mainly those that had nil collections over several months/ years and had applied for delisting.
While number of challans with missing PAN / TAN were negligible, the number of records with fictitious / non-existent PAN
/ TAN continued to be approximately 10%. For addressing this issue, various measures were discussed and agreed
upon. These included introducing bar-coded pre-printed challans, verifying PAN / TAN entry against a regional
database provided by the Income-Tax department, using the bulk query facility of the Income Tax department,
etc. It was decided that in certain cases, the banks could also request for a copy of the PAN / TAN card from
the tax payer.
Reconciliation of the funds settled with the RBI and the OLTAS data transmitted by banks on day-to-day basis. The difference
for January 2006 was found to be only 2.46 crores while the total tax collection was Rs.7327.40 crores.
With concerted effort from the CBDT, RBI, the banks and the IBA, the On-line Tax Accounting for the Direct Taxes has become
a reality. This project is one of its kind in the whole world.