Self-attested PAN photocopy for business deals to relevant authorities.
The Central Board of Direct Taxes (CBDT) has decided to make mandatory the submission of self-attested photocopy of PAN for business transactions to the relevant authorities.
The objective behind the move is to check the malpractice of furnishing wrong permanent account numbers (PAN) in such transactions.
Under rule 114 C of the Income Tax Act, parties involved in such transactions include banks, post offices, registrar of properties, stock markets, investment banks, broking firms and authorities for installation of telephones.
In a recent meeting held with chief commissioners and director generals across the country, it was decided that Form 60/61 used for collecting assessee information will be redesigned. The software is also being reworked for effective collation, especially from assesses not having PAN numbers.
It has been found that out of a total of 84,000 assesses entering into high-value transactions in Mumbai, the department has information only about 35,000 individuals. The rest are effectively out of the tax net.
In a related development, as part of the Kelkar committee recommendations, the income tax department will set up electronic data interchange (EDI) with banks, stock exchanges, telephone companies and regional transport authorities, among others.
The department has found gross misuse of tax breaks by assesses while claiming deduction under Section 10 A of the Act which pertains to free trade zone. Misuses have also been reported with regard to claims for deduction under Section 10BA that relates to export of handmade articles or things of artistic value using wood as main raw material, and deduction under 80IA with respect to profits from industrial undertakings or enterprises engaged in infrastructure and profits out of export business.
Under infrastructure undertakings, 65 surveys were conducted which led to a detection of undisclosed income of Rs 233.18 crore earned from developing and housing projects.
All builders of commercial and residential projects and corporate and non-corporate assesses who have infused fresh capital in their respective ventures will now form part of the scrutiny assessment for the income tax department.
In its new guidelines for scrutiny assessment for the year 2006-07, the CBDT has directed the department all over India to compulsorily put the returns filed by the builders who finalise their accounts under the project completion method for scrutiny. Scrutiny assessment refers to the rigorous examination of the returns filed by these companies or entities.
Both corporate and non-corporate assesses who have infused fresh capital into their projects will also come under scrutiny assessment but the floor for assessment is above Rs 1 crore in metropolitan cities and in Hyderabad, Pune, Bangalore and Ahmedabad. For other cities, the scrutiny for non-corporate assesses will take place if the capital infusion is above Rs 10 lakh and Rs 50 lakh for corporate firms.