Tax defaulters beware!

With tax recovery to the tune of more than Rs 1 lakh crore (Rs 1 trillion) held up for lack of information about the whereabouts of defaulters, the Income Tax department is working on plans to publish their names in newspapers.

The problem has been further compounded with several of the tax defaulters having created 'benami' assets to escape the dragnet.

The I-T department is embarking on this 'out of box solution' of bringing the names of tax defaulters in public domain in a bid to expose them.

Click NEXT to read further. . .

The department, according to the official proposal, will publish in newspapers the names of those defaulting assessees who are either not traceable or whose assets are not identifiable.

Informants, in such cases, will also be given incentives which may include cash rewards, the proposal said.

The assests, according to I-T sources, are not identifiable as either they are being created and invested under benami heads or are not ascribed directly to the defaulting taxpayer, and are on the name of their extended family members or friends.

Click NEXT to read further. . .

According to the latest data of the I-T department, out of a total outstanding arrear demand of Rs 2,29,032 crore (Rs 2,290.32 billion) till March 2010, an amount of Rs 9,476 crore (Rs 94.76 billion) is unrealized or held up as the assessee is 'not traceable' while Rs 92,360 crore (Rs 923.6 billion) is stuck as there are 'no assets'.

The proposal, termed 'Out of Box solution for discovery of assets', was recently discussed by the top brass of the department during the recently held I-T chief commissioners and directors general conference held in New Delhi.

The annual conference, inaugurated by Finance Minister Pranab Mukherjee, was attended by the top brass of the investigation, intelligence, recovery and other enforcement wings of the I-T department.

Click NEXT to read further. . .

Important deliberations, including this issue, discussed during the conference are subsequently taken forward and implemented as policy issues by the I-T department.

"The proposal will be implemented after weighing all the pros and cons about the scheme and studying the prevalent practises in other tax systems about such issues across the world," a senior I-T officer said.

The department is also planning to give wide publicity to its scheme of tapping and encouraging 'informants' to unearth tax evasion and gain tip-off on the whereabouts of absconders who have evaded huge taxes.