Govt warns tax evaders to correctly pay dues or face action
December, 11th 2012
Cracking the whip on tax evaders, the government today asked all income tax assesses to disclose their true income or risk getting a notice from the tax department. The Finance Ministry warned taxpayers any concealment of income while filing tax returns would not go unnoticed as the tax department had collated information on spending as well as investment patterns of taxpayers. It had the taxpayers to file correct returns by December 15 when the third instalment of advance tax is due.
There is no advantage in suppressing the true income or avoiding paying income tax that is due because, sooner than later, the information available with the Income Tax Department will lead the department to the doors of such persons, Revenue Secretary Sumit Bose said in a strongly-worded statement today.
Struggling to meet its tax collection target, the Finance Ministry said only 1.4 million taxpayers disclosed income above Rs 10 lakh in 2012-13, but 1.6 million made credit card payments of over Rs 2 lakh during the year. Nearly 1.1 million bought or sold house property of over Rs 30 lakh, 3.3 million had cash deposits of over Rs 10 lakh in savings bank account. Besides, 5.2 million people acquired mutual funds of Rs 2 lakh or more, bonds or debentures of Rs 5 lakh or more, shares issued by a company of Rs 1 lakh or more, and bonds issued by RBI of Rs 5 lakh or more. In Assessment Year 2012-13, only 1.4 million assesses, including salaried persons, hindu undivided families, professionals, firms, companies, transporters and retainers, have filed their returns disclosing a taxable income of over Rs 10 lakh. Any fair minded person will agree that this is a gross under-statement, Bose said.
As per the Finance Ministrys estimates, in 2011-12 there were about 30 million taxpayers with taxable income of up to Rs 10 lakh, whereas about 1.7 million taxpayers had income above Rs 10 lakh. Taxpayers with income of Rs 10-20 lakh comprised about 12.1% of the total tax collections, whereas those with income above Rs 20 lakh contributed 63% to total direct tax collections.
Bose said for assesses who have not yet paid the correct advance tax, there is an opportunity to rectify the mistake and pay the advance tax by December 15, 2012. It is the date on which the third instalment of advance tax for corporates and the second instalment for all other assesses is due.
Net direct tax collections as on November 15, 2012 stood at Rs 2.65 lakh crore, against the target of Rs 5.7 lakh crore this year. In 2011-12, the collections stood at Rs 4.94 lakh crore. The Finance Ministry has said that collections this year are expected to exceed the actual mop-up of last year.
In September, Finance Minister P Chidambaram had asked the tax department to go after low tax paying sectors which could add an additional Rs 30,000 crore to the revenue kitty.
The minister said even though the applicable tax rate for corporations was 30%, the effective tax rate was just 24% and even lower in some sectors. He said instead of randomly going after taxpayers most of whom duly pay their taxes, the department should focus on these below average sectors to see whether the average could be raised to collect more taxes.