22.7.16

Taxman to Issue 7 lakh Notices

The government is mounting pressure on taxpayers to come clean.
The income-tax office will shortly issue 7 lakh notices to fish out details on cash dealings, property purchases and conspicuous consumption from earnings that are suspected to have escaped tax.
The move is believed to be aimed at nudging individuals as well as businesses to declare hidden income and assets under the Income Declaration Scheme, which is being marketed by the government as an opportunity for tax evaders to disclose black money and get the taxman off their back by forking out 45% tax.
The transactions under tax lens include cash deposits of Rs.10 lakh or more in a savings bank account, and sale or purchase of immovable property valued Rs.30 lakh or more. The I-T department in Mumbai will issue 2 lakh notices after mining annual information returns filed by brokers, property registrars and others, said DK Saksena, principal chief commissioner of I-T, Mumbai. The I-T department in Mumbai mobilises about a third of the country's direct taxes.
“The department has details of about 90 lakh such transactions for the period 2009-10 to 2016-17,“ the tax department said in a statement, adding that many of the transactions do not have PAN (Permanent Account Number) linked to them. “The Income-Tax Department has with the help of in-house computer techniques, grouped such non-PAN transactions and identified 7 lakh high-risk clusters having around 14 lakh non-PAN transactions which are being scrutinised by the department closely,“ it added.
The Income Declaration Scheme 2016 (IDS) gives tax offenders a chance to declare undisclosed assets by September 30. They will need to pay a total 45% tax on the amount declared, which can be paid in instalments and in case of immovable property by September 2017.
“We are receiving enquiries on IDS. We believe many are waiting, going through the clarifications, and taking some time to plan. Since the government has staggered the payment of tax till September 30, 2017, there will be time to arrange liquidity,“ said Saksena. On the IDS provision allowing the department to reopen more than six-year-old assessments, he said the government believes IDS (which comes later) should override the I-T Act. “In searches, we mostly come across evidence of recent transactions, rarely do we find evidence of old undisclosed assets. Also, in cases of contradictory provisions, one may apply the principle of harmonious construction to arrive at a golden mean,“ said Saksena. In property deals, the difference between the official rate (based on which stamp duty was paid) and the declared rate would be considered to claim tax. For instance, if the declared deal value is Rs.1 crore as against Rs.1.50 crore, Rs.50 lakh would be considered income in the hands of the purchaser while the capital gains in the hands of the seller would be the difference between Rs.1.5 crore and price at which the property was originally bought.
“However, assessees who have paid cash from accounted, tax-paid money to pay the cash component which is rampant in property deals may find it difficult to explain to the satisfaction of the I-T department,“ said senior chartered accountant Dilip Lakhani. To begin with, the department will issue letters asking people to provide PAN number against these transactions. The information can be submitted online.
An e-filing portal will allow people to own up transactions and provide structured response electronically using a Unique Transaction Sequence Number provided in the letter sent to them. The department will take further action based on the information submitted electronically.

No comments: