Income-tax department identifies 30,000 cases for scrutiny

The government will scrutinise 30,000 cases among taxpayers, individual and non-individual, who tried regularising their unaccounted incomes by filing returns in response to the note ban in November last year.

Meanwhile, there has been 21 per cent growth in the online filing of tax returns as of August 1, with 23.3 million individuals filing returns for the financial year 2016-17, against 19.2 million in the corresponding period last year, when growth was 10 per cent. 

The jump could be owing to demonetisation, the introduction of the goods and services tax (GST), and other back money-deterrent measures announced by the government.

“We have selected 30,000 cases for partial scrutiny and full scrutiny of entities and individuals who tried to regularise their unaccounted income during demonetisation,” said a senior official in the Central Board of Direct Taxes (CBDT).

The income-tax (I-T) department has identified people who either showed a significant jump in ‘cash in hand’, or filed a return for the first time, reporting a big sum.

“There are many cases whose cash in hand reported in the tax return does not match their income reported in previous years. There are others who filed a return for the first time showing a cash in hand of Rs 10 lakh or Rs 20 lakh. How do you justify that? They will now face scrutiny,” said the official.

There are people who revised their returns for the previous two fiscal years to avoid coming under scrutiny, but have now been identified by the I-T department.

The I-T department has a steep collection target of Rs 9.8 lakh crore, a growth rate of 15.7 per cent, compared to 14.3 per cent in the previous fiscal year. The I-T rate on income between Rs 2.5 lakh and Rs 5 lakh has been cut to 5 per cent from 10 per cent from the current year.  

The strategy includes litigation management, disposing of high-value cases, scaling up searches and seizures, strengthening systems and investigation teams, and tying up with global data mining companies for information gathering.

The last date for filing returns was extended to August 5, and the government on Friday said that all I-T offices would remain open till midnight on Saturday to facilitate return filing.

The advance tax paid by individuals recorded 40 per cent growth in the first quarter of the fiscal year, which could be an aftermath of demonetisation, with more non-corporates recording higher incomes in their books.

After demonetisation, the tax department conducted searches on 900 groups of people up to March this year, resulting in seizures of Rs 900 crore and people admitting to having undisclosed incomes of Rs 7,961 crore. Besides, 8,239 surveys were conducted and they detected undisclosed incomes of Rs 6,745 crore.

In the current fiscal year, the tax department has seized assets worth Rs 103 crore after conducting searches on 102 groups that admitted to undisclosed incomes of Rs 2,670 crore. 

The department has also conducted surveys in 202 cases, leading to a detection of black money of Rs 150 crore.

The government had come up with two income declaration schemes last year, providing an opportunity to black money holders to disclose unaccounted income by paying the tax and penalty.

The Income Declaration Scheme fetched the government close to Rs 12,000 crore in the last fiscal year, and another Rs 10,000 crore from that is expected this year due to the staggered payment option.

The taxman is watching you

They tried to regularise unaccounted income by filing tax returns 

What kind of cases are these? 
Cash in hand reported is significantly higher than the income declared in the previous years
People who filed returns for the first time reported cash in hand of Rs 5 lakh/Rs 10 lakh 

What will be the action taken? 
Notices have been sent by the tax department. If found to be a defaulter, he/she will face a penalty of 50-200% 

Note ban triggers higher returns 
E-filing of returns sees 21% growth up to August 1 at 23.3 million filers, up from 19.2 million filers last year

I-T offices to remain open till midnight today
To facilitate manual filing of I-T returns on August 5, the CBDT has directed necessary arrangements be made for receiving ITRs up to midnight in all its offices

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