New Delhi: The Income Tax Department is likely to scrutinize tax returns of over 700 top companies, including A-group firms listed on the Bombay Stock Exchange and NSE-500, to detect possible tax evasion.
As part of the Finance Ministry’s efforts to meet the target of corporate and income tax collections for the current fiscal, all NSE-500 and BSE A-group companies listed as on 31 March, 2007 will be “compulsorily scrutinized”, official sources told PTI.
At present, 217 companies are listed at BSE under the A-group.
Under the scrutiny process, the Tax Department can send notices to the firms to explain any discrepancy in the information provided through tax returns filed, advance tax deposits, tax deduction at source (TDS), and their income and expenditure for up to three years.
For the returns filed till 31 July, the sources said, Income tax officers can serve the scrutiny notice any time on or before 31 July, 2008.
Under the annual action plan, recently approved by the Finance Ministry, the Central Board of Direct Taxes (CBDT) is understood to have directed the Chief Commissioners, Income Tax, to scrutinize the returns of these companies to ensure that they deposited all due taxes, and in time.
The sources said all stock brokers and commodity brokers as well as their sub-brokers earning Rs1 crore or more in brokerage will also be brought under the scrutiny net.
For the current fiscal, government has set a target of Rs2,67,40 crore direct tax collections, expecting a growth of 16.25% over Rs2,30,091 crore collected last fiscal.
In April-July period, corporate taxes contributed Rs38,757.4 crore, 23.3% more than April-July, 2006. However, the government is hopeful that after the scrutiny of top companies more revenue could be realised.
Official sources said the CBDT has also directed the field officials to scrutinize the returns of all those companies having book-profits of over Rs50 lakh in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad.
In other places, the companies with a book-profit exceeding Rs25 lakh would be brought under the scrutiny net, the sources said.
In addition, the Income Tax Department is expected to look into the returns filed by the firms, whose total value of international transactions exceeds Rs15 crore.
Notably, after the scrutiny of the returns filed by the companies and high-networth individuals, the Income Tax department had raised demand for additional Rs54,000 crore tax collections in 2006-07.
The department is also likely to scrutinize all those cases, where refunds are more than Rs25 lakh in a year, the sources added.