Small entrepreneurs are not small anymore, especially when it comes to evading taxes. The income tax (I-T) department has detected a major concealment of income in the low-profile micro, small and medium enterprises (MSME) sector. Along with real estate, the MSME sector is in the I-T department’s latest watch list, with the taxmen detecting an undisclosed income of Rs 5,895 crore during 2010-11.
“Till now the MSME was an untapped sector, but recent detection of a large number of cases of undisclosed income has led us to create a new category for the first time on MSMEs, so that it could be effectively monitored,” an I-T source said.
“A large number of entrepreneurs usurped bank loans borrowed for setting up units by siphoning it for personal gains and ultimately concealing incomes,” a senior official in the MSME ministry said.