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Business News/ Politics / Policy/  Arun Jaitley asks taxmen to chase domestic black money
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Arun Jaitley asks taxmen to chase domestic black money

Jaitley tells CBDT officials to take steps to augment revenue as govt seeks ways to crack down on tax evaders

Arun Jaitley has asked officers to widen the tax base and go after tax evaders while retaining an assessee-friendly manner. Photo: Hindustan TimesPremium
Arun Jaitley has asked officers to widen the tax base and go after tax evaders while retaining an assessee-friendly manner. Photo: Hindustan Times

New Delhi: Union finance minister Arun Jaitley on Thursday asked tax department officers to track black money in circulation domestically, which he emphasized was much higher than that stashed in foreign accounts.

In a review meeting with principal chief commissioners, principal director general, chief commissioners and directors general of income tax on Thursday, the finance minister asked these officers to focus on those sectors where domestic black money is most prevalent, the finance ministry said in a press release.

Real estate, construction and gold purchases are sectors the government has been closely monitoring for checking black money. The ruling Bharatiya Janata Party (BJP) government had made black money a major election plank and had promised steps to bring back unaccounted money stashed abroad. On Wednesday, after being rapped by the Supreme Court, the centre also submitted a list of Indians having accounts in foreign banks that the government had received from various foreign governments.

The finance minister pointed out that recovery of black money and taxes due thereon will help the department meet its tax collection targets.

The meeting was also attended by minister for state for finance Nirmala Sitharaman, revenue secretary Shaktikanta Das, Central Board of Direct Taxes (CBDT) chairman K.V. Chowdary and other senior officials.

“Circulation of black money domestically will be much higher than the unaccounted money that is stashed in overseas accounts as everyone does not have a recourse to open an account overseas," said B.M. Singh, former chairman of CBDT.

“Domestically, black money is mainly in real estate deals as properties are not registered at the value at which they are purchased. Also, the circle rates don’t keep up with the actual market value, giving scope for such deals," he said. He added that since Indian households prefer to own more gold, cash purchases of gold have also helped black money enter the system.

The finance minister also expressed confidence that with the economy improving, the government will be able to meet tax collection targets. He pointed out that the services sector is doing well while the manufacturing sector is gradually picking up. He added that economic growth will pick up in the remaining two quarters of the current fiscal.

The government aims to collect 7.36 trillion in direct taxes this fiscal and has collected 2.96 trillion in net direct taxes till 20 October.

The finance minister also asked officers to widen the tax base and go after tax evaders while retaining an assessee-friendly manner.

The government has taken a number of measures to augment revenue collections, including monitoring advance tax payments and non-filers, and ensure that steps are taken to deter default in payment of tax deducted at source and self assessment tax. The department has decided to monitor top tax deducting firms which have paid 10% less advance tax this fiscal as compared with the earlier fiscal year.

The tax department will also target e-filers who had filed income tax returns electronically for either of the last three years but have not filed returns for the current assessment year.

The tax department has compiled a list of more than 500,000 tax payers above a certain income threshold who have turned non-filers for the assessment year (AY) 2014-15. In an internal communication dated 29 October to principal and chief commissioners of income tax, CBDT has directed the chief commissioners of income tax to “personally monitor these cases".

“It has been noticed that 509,898 taxpayers who have submitted e-return of AY2011-12, or 2012-13, or 2013-14 (up to 20 October 2014), with returned income of more than 10 lakh, or paid a self assessment tax of more than/equal to 1 lakh (as per ITR), have not filed their ITR for the AY2014-15," the communication said.

A high refund outgo and slow economic revival has dented direct tax collections—especially corporate tax—with the government expected to fall significantly short of its budgeted targets, forcing the department to look for new ways to garner revenue. The department has been aggressively leveraging technology to identify tax evaders.

Last year, the department through its business intelligence project, had tracked high-value financial transactions like credit-card payments, cash deposits in banks, and purchase of tax-saving instruments and matched them with returns filed by individuals concerned using their permanent account number to check for tax evaders. The department had sent notices to more than two million non-filers through this route.

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Published: 30 Oct 2014, 09:45 PM IST
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