With just two days left in the four-month long black money compliance window, the tax department has sharply stepped up its searches and surveys across the country to target possible tax evaders. The number of surveys per day by the tax department in the last one month have surged over eight times the average daily count during 2015-16, two officials involved in the exercise said.
Jewellery dealers, traders, shop owners and small businessmen are cited as being among those covered under the latest round of surveys, which come in the backdrop of reports that the collections under the black money scheme have been far lower than the internal estimates of tax department.
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Last year, as per Ministry of Finance’s data, 4,422 surveys were conducted by the tax department in FY16, translating into a daily average of about 12 surveys. The number of surveys were higher in FY14 and FY15, when the total number of surveys stood at 5,327 (average of about 15 a day) and 5,035 (average of 14 a day), respectively. “This September has seen unprecedented number of surveys by the tax department,” a senior official said. Another official corroborated this and said the number of surveys is now over eight times the daily average.
Queries on the matter were sent by The Indian Express to spokespersons of CBDT and Ministry of Finance. The CBDT spokesperson responded by saying that surveys are a subject matter of the Member Investigation and that she did not have the authority to respond to it. A separate e-mail query sent to the Department of Revenue was redirected to the office of CBDT chairperson, for which there was no official response.
By conducting surveys, I-T authorities independently gather information relating to financial transactions of persons relevant to any proceedings under the Income-Tax Act. Information collected through surveys may lead to discovery of new assessees and stop filers and also helps in detecting tax violations like, under reporting of income in returns of filers, failure to deduct tax at source and failure to furnish returns and statements by taxpayers.
The tax department also directed its field officers to hold more one-to-one interactions with the highest taxpayers in their respective assessment circles, in order to encourage them to come clean under the compliance window, a senior tax department official said.
“With increased searches and surveys, tax officials can identify possible tax evaders. If an anomaly is being detected for the current financial year, the tax officials are asking the taxpayers to come clean for previous years under the (income declaration) scheme,” another official said, adding that the final numbers are likely to reflect undeclared wealth only for recent years. As per Section 133A of Income-Tax Act, which details the power of survey delegated to the tax department, an income-tax authority is empowered to enter any place at which a business or a profession is carried out.
The black money compliance window under the Income Declaration Scheme (IDS) was announced in Union Budget for 2016-17. Last week, revenue secretary Hasmukh Adhia had said that though there are expectations of extension of deadline for IDS, the last date will not be extended. One of the officials cited above said that an extension for the scheme’s deadline was also considered difficult as any such move would require an amendment to the Finance Act, 2016.
Under the IDS, people can disclose their undeclared wealth and escape prosecution. The scheme promises immunity by exempting declared assets from Wealth Tax, scrutiny/enquiry and prosecution under Income-tax Act/Wealth-tax act, and immunity from Benami Transactions (Prohibition) Act, 1988.
The government in July had extended the deadline for payment of tax and penalty under the black money disclosure scheme and allowed declarants to pay the amount in three instalments by September 30, 2017. The first installment of 25 per cent will have to be paid by November 2016 to be followed by 25 per cent by March 31, 2017. The rest will have to be paid by September 30, 2017. Earlier, tax, surcharge and penalty under the black money disclosure window were required to be paid by November 30 this year.