Deciding against bringing in a voluntary disclosure of income scheme (VDIS), the income tax department has decided to use some force in this regard.
A senior Central Board of Direct Taxes (CBDT) official told Business Standard the department had initiated an extensive exercise under which it was sending notices on money kept abroad on the basis of tips/leads from tax authorities in various countries and also transaction data over recent years. The idea is that we want to drive home the message about the I-T department getting ready to bite you, so pay the taxes due, he said.
The Income Tax (I-T) Act had provisions to disclose hidden income and assets voluntarily, getting in return a waiver of penalty and also prosecution, he added. The officer declined to give details, but said work in this regard was on.
In the light of the need for secrecy on the information coming from abroad and also the pressure to get additional tax this year due to sluggish performance on this front till October, the whole exercise is being handled by senior officials from the finance ministry itself.
We have already been successful in getting substantial additional revenue, as many assesses were paying up their due tax after the departments questioning and the momentum is set to pick up further in the coming months, said the official. He said finance minister Pranab Mukherjee was likely to announce the outcome of this exercise at an appropriate time.
Net direct tax collections rose only by 7.1 per cent to Rs 2.19 lakh crore during the April-October period against Rs 2.04 lakh crore in the same period of 2010-11.
With a projected growth of 19.5 per cent over 2010-11 collections, the governments budget estimate for direct tax collection in the current financial year has been pegged at Rs 5.33 lakh crore. On top of it, the minster asked the department to target 10 per cent over the estimate.
The CBDT official said they were trying hard. The initiatives on ensuring additional tax collection based on the available information and creation of an atmosphere for voluntary disclosures would certainly help in achieving the target, he added.