Tax evaders beware. The income tax department may increase the number of searches to unearth black money. The government has accepted the recommendation of the Parliament Standing Committee on Finance to increase searches as well as to improve their quality to unearth unaccounted wealth.
While acknowledging that the government had issued appropriate instructions to field formation on searches as per the committees recommendation, it said the ministry could do well by analysing the trends of evasion as well as ostentatious display of wealth and huge spending in the country.
The committee, therefore, expects the government to carry out a detailed analysis of the entire nature of payouts on personal functions, which involve ostentatious display of wealth and huge spending on the basis of which a region- or city-specific plan of action could be formulated for unearthing unaccounted income, the panel said in its 42nd report tabled in Lok Sabha on Tuesday.
Observing that instances of large-scale evasion of taxes were unearthed by measures such as banking cash transaction tax and annual information return, the committee said such instances of unearthing of unaccounted income had given credence to the perception about the existence of huge amount of tax evasion, particularly in the metropolitan cities.
The committee also emphasised on the need to raising the ceiling limit on the percentage of cases taken up for scrutiny.
At present, the income-tax department takes up 2% cases for scrutiny that it has agreed to raise as suggested by the panel.