The Income tax department is likely to scrutinise tax returns of over 700 top companies, including A-group category companies listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE)-500, to detect possible 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 companies and BSE A-group companies listed on March 31, 2007 will be “compulsorily scrutinised”, official sources said.
At present, 217 companies are listed on the BSE under the A-group.
Under the scrutiny process, the income tax department can send notices to 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 returns filed till July 31, sources said, income tax officers can serve the scrutiny notice any time on or before July 31, 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 of income tax to scrutinise the returns of these companies to ensure that they deposited all due taxes, and in time. All stock brokers and commodity brokers as well as their sub-brokers earning Rs 1 crore or more in brokerages, will also be brought under the scrutiny net, sources said.
For the current financial year, the government has set a target of Rs 2,67,40 crore for direct tax collections, expecting a growth of 16.25 per cent over Rs 2,30,091 crore collected last fiscal.
During the April-July 2007-08, corporate taxes contributed Rs 38,757.4 crore, which is 23.3 per cent more than the amount collected during April-July 2006-07. However, the government is hopeful that after the scrutiny of top companies, more revenue would be realised.