Over 6.6 lakh high networth individuals who made big-ticket purchases will do better to pay taxes in step with their transactions and file returns by July 31.
Warning that the taxman would reach every one of these rich people, finance minister P Chidambaram said,It was only a matter of time...in the next three, six or nine months.
According to the minister, about 65% of these people had not even bothered to reply to letters sent by the income tax department and some might have even concealed their identities. Thissmugness might turn out to be costly for them in the days ahead, he cautioned them.
Chidambaram said over 17.5 lakh high-value transactions (totaling over Rs 13 lakh crore) had been noted in the annual information returns (AIR) database.
Of the high networth individuals who dealt with such big money, 4.75 lakh had not even quoted their permanent account numbers (PAN), clearly suggesting either tax evasion or short-payment of tax.
The AIRs on seven defined large transactions are filed by third parties like banks, credit card companies and land registrars. These are assimilated in a computerised repository called the tax information network. Chidambaram said more items would be added to the AIRs, but only after making a good beginning on using intelligence already gathered.
CATCH YOU SOON! FOUR-PRONGED STRATEGY
Identify the high networth individual Ascertain if he has a permanent account number Check if he has filed income tax returns for the year See if transaction is reflected in the return filed by him
He, however, made it clear the government had no intent to harass high networth individuals if they filed returns.
But if they did not, the I-T department would find ways to reach them, he promised. Chidambaram said the department would adopt a four-pronged strategy to nail down those not complying, identify them, find out if they had PANs, ascertain whether they filed returns and see if they reflected transactions.
The minister said he was confident of meeting thestiff target to increase direct tax collection by 27.7% this fiscal. The target is pegged at Rs 2.1 lakh crore, up Rs 40,000 crore over the previous years. The target for arrears collection has been set at Rs 11,000 crore this fiscal.