Bought expensive things, but not filed tax returns? Watch out

Gaurav ChoudhuryMoneycontrol

If you have refurbished your home with expensive furnishings or bought a high-end television set but not bothered to file income tax returns, then you could be under the taxmen’s radar as part of a new move to detect “non-filers” who may have concealed assets and evaded taxes.Till January, the tax department has identified 6.78 million such potential non-filers.

“These people have carried out high value transactions in the financial year 2014-15 but did not file income tax returns,” a source told Moneycontrol.

The government has also launched “Project Insight” to enable “voluntary compliance and deter non-compliance,” to impart confidence that all eligible persons pay appropriate tax and to “promote fair and judicious tax administration”.

An Income Tax Transaction Analysis Centre (INTRAC) that will act as the data integration, processing, data quality monitoring, warehousing, analytics, web and text mining, alert generation, compliance management, enterprise reporting and research support centres.

Within INTRAC, a new Compliance Management Central Processing Centre (CMCPC) will also be set up under this project for collating data acquired on tax payers and non-files adopting a “non-intrusive information driven approach”.

The CMCPC, which will be algorithm driven, will carry out preliminary verification, issue notices and follow-up on notices.

“Project Insight” will be rolled out in a phased manner from May 2017.

Moneycontrol had reported in October that casino operators in Goa, 'dabba traders’, online medicine exporters, realty companies, several premium jewellery and watch traders, some restaurant chains and bullion traders were among scores of people that are under the government’s scrutiny for suspected tax evasion totalling thousands of crores of rupees.

The income tax (I-T) department, which is fortifying its tech capabilities, is clamping down on tax dodgers using sophisticated devices to hide information.

The information relating to the identified non-filers has been made available on the 'Compliance Module' on the e-filing portal of the Income Tax Department.

The PAN holder will be able to submit the response electronically and keep a printout of the submitted response for record.

The Central Board of Direct Taxes (CBDT) has issued a “Digital Evidence Investigation Manual,” outlining how tax officials should scout for incriminating data stored in computers and mobile phones.

Under rules, individuals are required to disclose their income tax permanent account numbers (PAN) — a unique 10-digit alpha-numeric code allotted to tax payers--for cash transactions above Rs 2 lakh as also settling hotel bills that exceed Rs 50,000. Quoting PAN is also mandatory for cash deposits on banks above Rs 50,000, and air tickets and tour package bills worth more than Rs 50,000, among others.

The income tax department has also been collating data on property deals, a source of rampant black money transactions.

Tax officials, sources told Moneycontrol, have identified thousands of transactions with “under-reported” property values, where there are big differences between the declared and market rates.

The I-T department have matched data of “declared value” of property -- from the registrar of properties -- with “market rates” obtained from private consultancies.