If you failed to file income tax return for any assessment year in the past and later changed mailing address without informing the tax department, the authorities may soon be knocking at your doors. All the tax department needs is just one clue, which, it is sure even the smartest of offenders leave behind.
As about one-fourth of the PAN cardholders who were sent letters for non-filing of income tax returns did not get any intimation because of change in the address, the Income Tax department has started a search operation with focus on identifying these tax evaders in eight major cities: Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Bangalore, Hyderabad and Pune.
With every penny becoming important for the government because of a possible fall in tax collections, it is relying on both formal and informal methods for reaching these non-filers. Transaction trails of these people are being monitored to get more information about them. In some cases, neighbours at the earlier address are being contacted to check the whereabouts of such non-filers.
"In many cases letters were not served because people changed their address. We are making enquiries to take these cases to their logical end so that it is not a damper for people who filed returns and paid taxes after receiving the letter. We are expecting a substantial success in this category as most people leave a trail while carrying out transactions," said an official from the department.
Of 2,10,000 people who were issued letters in six batches of 35,000 letters each, over 49,500 paid self-assessment tax of Rs 435 crore and about 14,000 paid advance tax of Rs 400 crore by July 31. As some of them filed returns for more than one assessment year, a total of 2,20,000 returns have been submitted by 1,60,000 people. Of the remaining 50,000, some have not replied, while many can't be traced.
Earlier this year, the Central Board of Direct Taxes had identified 1.2 million taxpayers who had a PAN card but did not file their income tax returns. Based on various parameters it made seven categories within these 1.2 million non-filers and would gradually send letters to all categories. The results were thrown up by a pilot that involved mining and analyzing taxpayer data available with the department.
Asked whether the tax department was concentrating on big fish, the official said those could be on the priority list but others were not spared too. "We are touching everybody; the question is priority. Our main focus is eight big cities but we are keeping an eye on non-filers in other regions too," he said.
A compliance management cell has been set up to monitor return filing and tax payment of the target segment. This information is now being made available to the jurisdictional assessing authorities through the online monitoring system for verification and issue of notices in relevant cases.
While 140 million people have a PAN card each today, in India - a country of 1.2 billion people - there are only 34 million taxpayers. Many people who don't file return get a PAN as it works as an identity proof at many places. About 13-14 lakh new PAN cards are issued every year by the tax department and details of just 0.2% applicants (200 per one lakh) are verified by it.