The department has now decided to keep a tab on the trade by putting its intelligence wing on the job to gather information on entities involved in trading carbon credits and pass on the relevant data to I-T investigation and international taxation wings for taking action against tax evasion in this sector.
A preliminary study by the I-T Department found that large companies listed on the stock exchanges are not exactly ensuring taxes against the profits out of the sale of carbon credits and are putting the money earned
in other businesses.
India is one of the largest producers of carbon credits in the world.
"The Directors of Income Tax of the elite Central Information Branch of the I-T Intelligence wing will be the nodal agency to deal with all the relevant information of carbon credits business and transactions," a top I-T officer said.
The DITs, who are commissioner-rank officials of the department, are also being trained in all aspects of carbon credit taxation at various training institutions, right from the basics to trading on stock exchanges worldwide, the officer said.
In relevant cases, the investigation and international taxation units can undertake searches to obtain documents and other details of the firm and prepare a proper case for taxation, the officer added.