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Rediff.com  » Business » How the govt plans to plug tax evasion

How the govt plans to plug tax evasion

By Vrishti Beniwal
April 27, 2011 09:39 IST
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In its drive against tax evasion, the finance ministry is planning to add to the list of high-value transactions required to be reported to the revenue department in annual information returns (AIRs).

This is besides lowering the bar in case of some transactions.

In AIRs, intermediaries, such as banks, are supposed to report high-value transactions to the tax department so that it can match this information with a person's returns to spot any possible anomaly.

"While existing limits are being changed, some new transactions may be added. We will soon issue a notification," said a finance ministry official, who did not wish to be identified.

The additions, say officials, may include current deposits aggregating to Rs 50 lakh or more in a year. This will be in addition to the Rs 10 lakh savings deposits that banks have to report at present.

Debit card payments aggregating to Rs 2 lakh or more in a year will also have to be reported, according to the proposal. At present, this information is given only in case of credit cards.

At present, purchase or sale of an immovable property worth Rs 30 lakh or more is reported. This is proposed to be reduced to Rs 20 lakh.

Fixed deposits, bank drafts and pay orders may also come under the AIR ambit. According to the proposal, cash payment of Rs 1 lakh in a day for a bank draft or a pay order and fixed deposits aggregating to Rs 5 lakh in a year will have to be reported to the taxman.

The Income-Tax Department also plans to make quoting of the Permanent Account Number in all documents for sale and purchase of bullion or jewellery involving cash transfer of Rs 5 lakh or more mandatory.

PAN may also be required for a one-time cash payment of Rs 1 lakh or more as life insurance premium, amid concerns that terrorists and insurgents may be parking funds in high-value insurance policies.

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Vrishti Beniwal
Source: source
Related News: AIR, Income-Tax Department, PAN
 

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