Business Daily from THE HINDU group of publications
Wednesday, Jul 05, 2006
Industry & Economy - Income Tax
`Pay up tax on high value deals'
All in the AIR
The AIRs have thrown up 17,52,652 transactions (relating to financial year 2004-05) involving 6,60,000 separate parties.
As many as 1,84,980 parties had undertaken high value transactions with a permanent account number and about 4,75,019 without PAN.
Letters have been despatched to 6,60,000 parties and about 65 per cent of them have not replied.
THE FINANCE MINISTER, Mr P. Chidambaram, during a meet of Chief Commissioners & Directors General of income-tax at Vigyan Bhavan in New Delhi on Tuesday. R.V. Moorthy
New Delhi , July 4
High networth individuals (HNIs) who have purchased property for over Rs 30 lakh, spent over Rs 2 lakh in a year through credit card or invested over Rs 2 lakh in mutual funds may soon find the taxman knocking at their doors if their names figure in the Annual Information Returns (AIR) filed with the Tax Department.
The taxman is now determined to reach such HNIs although initial attempts in this regard had proved futile.
The Finance Minister, Mr P. Chidambaram, on Tuesday asked senior income-tax officials to find ways and means to reach those whose names have been thrown up by the AIR filed by third parties such as banks, mutual funds and property transfer registrars.
"I have asked my officials to reach a large proportion of the people under AIR. This is only the first year of AIR returns. We will eventually reach every one of them. My advice to all those who have made large transactions is - Please file your tax returns before July 31," Mr Chidambaram told presspersons after inaugurating the 22nd Annual Conference of Chief Commissioners and Directors-General of Income-Tax here.
He disclosed that the AIRs have thrown up 17,52,652 transactions (relating to financial year 2004-05) involving 6,60,000 separate parties.
As many as 1,84,980 parties had undertaken such high value transactions with a permanent account number and about 4,75,019 without PAN.
Although the Tax Department had despatched letters to the 6,60,000 parties, Mr Chidambaram said that about 65 per cent of them have not replied.
"They are complacent. These are not poor, lower middle class or middle class people. They are rich people. Sooner or later they will be reached. The Tax Department would pursue every single person under AIR," he said. Stating that the Government has no intention of harassing taxpayers, the Finance Minister said that he was only keen that there be further improvement in the level of tax compliance.
Mr Chidambaram also ruled out any immediate plan to broadbase the categories of transactions coming under the AIR returns.
Currently, seven categories of transactions are under the scope of AIR.
"First let me deal with the existing magnitude of transactions on which we already have information. Then we can add more," he said.
On direct tax arrears, the Finance Minister said that the Department has been given a target of Rs 11,000 crore for recovery of tax arrears during the current fiscal.
A senior Finance Ministry official said that the Tax Department had recovered about Rs 7,000 crore of direct tax arrears in 2005-06.
Asked about the status of the expert group's report on the proposed new income-tax law, Mr Chidambaram said that he has given them time till July 15 and a first draft of the report is expected to be ready this month.
He also made it clear that the Bill to replace the existing income-tax law would not be introduced in the monsoon session of Parliament.
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