Tightening the noose around tax evaders, the Income Tax Department will launch a special drive from January 20 to verify high value transactions, under which tax officials may visit the premises of assessees and enquire about their sources of income.
"The CBDT has directed the I-T Department to launch a special drive, from January 20 to March 20, for verifying high value transactions (investments/deposits/ expenditure) from persons who are not assessed to income tax or who have not furnished their PAN while entering into such transactions," said a Finance Ministry release.
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I-T Dept to launch drive against tax evasion from Jan 20
The high value transactions that will be under the I-T Department scanner include the purchase of property, vehicles, shares and bonds, fixed deposits in banks and post offices, etc.
The assessees, the release said, "will be required to explain the source of high value investments/deposits/expenditure and whether these are properly accounted for/explained in the income tax returns filed by them."
In some cases, it added, "The tax officials may also visit the premises of the high value investors/depositors/spenders."
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I-T Dept to launch drive against tax evasion from Jan 20
The two-month-long drive is expected to raise tax collections and help the government bridge the fiscal deficit, which is expected to exceed the Budget target of 4.6 per cent of the gross domestic product.
According to the release, those receiving notices under the special drive will be required to furnish their Permanent Account Number.
Those who do not have PAN would be required to immediately apply for the number to NSDL or UTISL, it added.
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I-T Dept to launch drive against tax evasion from Jan 20
The department further said there are penal consequences for not obtaining a PAN or reporting such high value transactions.
There can be a penalty of up to 300 per cent of the unpaid tax for not paying proper taxes and prosecution in some cases.
"Persons who have not properly accounted for the high value transactions are required to pay due taxes and file the income tax return within this financial year, i.e. by March 31, 2012," it said in the release.
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I-T Dept to launch drive against tax evasion from Jan 20
The I-T Department had made it mandatory from July 1, 2011, to flash a PAN card for any purchase of jewellery worth Rs 500,000 or more, a move aimed at helping it keep an eye on such high value transactions.
High-value purchases of jewellery, among other valuables, have often been feared to be a favoured route for circulation of black money and quoting of PAN would help the tax authorities track such transactions.
The payment of Rs 50,000 or more in a year for a life insurance premium also requires PAN.
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I-T Dept to launch drive against tax evasion from Jan 20
In addition, transactions such as the sale or purchase of any immovable property valued at Rs 500,000 or more, sale or purchase of motor vehicles other than two-wheelers and bank deposits exceeding Rs 50,000 requires a PAN.
Telephone connection applications, opening of bank accounts, hotel and restaurant bills over Rs 25,000 and mutual fund investments of Rs 50,000 and above, among others, also require a PAN card.
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