The income tax (I-T) department is shooting off as many as 70,000 letters to tax dodgers this month who have been identified through hi-tech computer software as big spenders. According to a finance ministry statement, while 35,000 letters were dispatched on Monday, the remaining 35,000 will be sent in the next 10 days.
Data analysis based on high expenditure by individuals on real estate and jewellery purchase and luxurious lifestyle that include stays at five-star hotels and foreign holidays has identified a target segment of 12,19,832 big spenders who have not filed I-T returns. “Rule-based algorithms were used to identify high-priority cases for follow-up and monitoring,” a senior official said. “The objective of the exercise is to get all tax payers to disclose their true income and pay appropriate taxes within the current financial year.”
Revenue secretary Sumit Bose has also asked the I-T department to set up a compliance management cell to ensure follow-up action and track return filing and tax payment of this “high priority” target segment. Preliminary assessment of the results show that a large number of taxpayers have filed return of income and paid self-assessment tax after initiation of this exercise. Taxes of more than Rs 600 crore have been paid as self assessment tax and advance tax by the target segment in the last three months. The department has, therefore, decided to expand the exercise and bring these high spenders into the tax net. A senior finance ministry official told MAIL TODAY that income tax collections are not commensurate with big ticket expenditure that has been taking place in the economy on buying real estate, credit card purchase and extravagant spending in five-star hotels and foreign jaunts by individuals. A senior I-T official said, “The entity could be an individual, a family or a group of concerns.
Once the entire spending is listed at one place, it will be matched with the declared income of the entity concerned,” he explained. “In case, the expenditure, whether it be on consumption or asset-building, exceeds the declared income from various sources, the income tax department will ask for an explanation from the concerned entity.” A large number of taxpayers have filed return of income and paid self-assessment tax after initiation of this exercise OUT OF THE INCOME TAX NET Well-heeled independent
professionals such as chartered accountants, private doctors and lawyers make up the category of income tax assessees who contribute virtually nothing to the national exchequer. Letters were earlier sent in three batches to 1,05,000 high-priority cases seeking to know whether the person had filed his return or not. Income tax collections are not commensurate with big-ticket expenditure that has been taking place in the economy on buying real estate, credit card purchase and extravagant spending in five star hotels and foreign jaunts by individuals.
