I-T officials are also looking into the finances of candidates who contested state elections in Uttar Pradesh, Punjab, Gujarat, and Karnataka, reports Shrimi Choudhary.
Ahead of both state assembly and general elections, the income tax department has decided to scrutinise candidates’ income and wealth as declared by them in their poll affidavits.
This is part of an action plan drawn up by the Central Board of Direct Taxes, which also includes other measures to shore up tax revenue and take action against evaders.
Until now, the CBDT, according to its arrangement with the Election Commission, only scrutinised cases that were being referred to it by the EC.
From this year, tax officials will look at the financial details of all candidates.
The CBDT has found a significant increase in assets of candidates from earlier declarations.
Also, some of them did not disclose their permanent account number (PAN) despite having assets of more than Rs 50 million.
The board had circulated a strategy paper for the investigation team of the I-T wing, asking taxmen to verify if the information of movable and immovable assets submitted by the contesting candidates was in line with their I-T filings.
Tax sleuths have been asked to submit the verification report within five months from the date of completion of the election process.
Sources said this was the first time the CBDT has made politicians’ affidavit scrutiny as part of its action plan.
Typically, the tax department mainly keeps a vigil to curb the influence of cash and freebies around election dates.
I-T officials are also looking into the finances of candidates who contested state elections in Uttar Pradesh, Punjab, Gujarat, and Karnataka.
“We have observed huge discrepancies in the declarations and the I-T filing of some of the candidates. So, it is necessary to prepare a strategy from selective verification to going the extra mile of taking action against them,” said a senior I-T official with direct knowledge of the plan.
The CBDT wants I-T officials to complete this exercise by July 31, and pursue further investigations subsequently.
Besides politicians, the CBDT’s action plan has focused on benami transactions, with guidance on ways to investigate such transactions under the Benami Transactions Act. The I-T department is targeting conclusion of 1,513 unaccounted properties worth Rs 43 billion, which it has attached.
The CBDT wants these cases to be finalised with prompt action against violators by September.
Further, tax officials were also given directives to dispose suspicious transaction reports they receive from banks and other intelligence units.
Besides, the CBDT directed tax department to launch prosecution in cases where the evidence is strong without completing assessment.
Typically, the tax department launches prosecution or charge sheets tax evaders only after arriving at a decision after completing tax assessment.
Interestingly, the CDBT kept the target for search and seizure unchanged. Sources said this year the searches would be conducted only on potential evaders based on specific inputs.
Apart from this, the CBDT asked taxmen to submit updated investigation reports on foreign assets cases under Paradise Papers and Panama Papers leaks by 5th and 10th of every month.