| The Income Tax authorities are seeking more disclosures from cash card users since they believe huge amounts of unaccounted cash is moving around the country via these cards. Cash cards were launched by a host of non- banking finance companies (NBFCs) filling gaps between money orders and bank transfers.
These two means of funds transfers leave a paper trail which cash cards do not, a loophole the chief commissioner of Income Tax (CCI-T) Pune is seeking to fill. Among the details the income tax department is seeking are who is buying the cash card, the source of those funds, who is receiving the funds and their end use, M Narasimhappa, (CCI-T), Pune, said.
We believe that thousands of crores of rupees are being transferred via such cash cards all over the country. All that is required now is for someone to go to the NBFC, pay the cash, get a scratch card whose number the buyer then communicates to the intended recipient.
That person then goes to the local branch of the NBFC and collects the cash on presenting the number. We would like to know more about these transactions which go through private channels, he said. The Income Tax department would like this information to be included in the AIR which can then be presented to the union finance ministry.
The suggestion for greater information on cash card transactions is one such idea from the move, he said. Another suggestion which has yielded income is checking out the use of central government benefits to housing schemes for low and middle income groups.
Under Section 80 I B (10) of the Income Tax Act, housing companies were allowed to claim 100% exemption on all income if they met the specifications laid down. We have found 12 such companies in Pune who have not fulfilled some criteria hence their concessions have been withdrawn. The four-year old scheme ended on March 31, 08 and they should have received completion certificates from the local civic body, Mr Narasimhappa said.
BOX: Given Punes industrial profile of being a manufacturing centre, the current slow down in the manufacturing sector has begun to bite. Income tax authorities have seen a 50% fall in tax receipts in the first five months of the current fiscal. Last year, 38% of targeted collections had happened in the first five months.
This year, although the target for tax receipts for the full year has risen by 19%, to Rs. 3312.4 crore, from actual collections of Rs. 2767.9 crore in 07-08, tax collections in the period April-August are down by 50%, M Narasimhappa, chief commissioner of Income Tax (CCI-T), Pune, told reporters, declining to give numbers.
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