Property deals in FM?s scanner?
Taxation laws likely to be tightened further to plug loopholes.india Updated: Feb 24, 2006 11:41 IST
P Chidambaram may announce a clutch of measures to plug the loopholes in taxation laws to check leak in revenue and nab tax evaders.
In the Union Budget to be unveiled next Tuesday, Chidambaram is also expected to make significant changes in the most popular one-by-six scheme that was launched to bring a large number into the tax net.
Further, the Finance Minister may specifically target to enhance the tax liability on those earning beyond Rs 8 lakh per annum. While personal tax rates are set to be left untouched, Chidambaram is likely to initiate steps to utilise the vast amount of data compiled through Annual Information Returns (AIRs) on lakhs of deals involving crores of rupees.
Sources divulged that property deals done under power of attorney might be subject to scrutiny to plug tax evasion. Currently, properties sold and registered are captured in the AIRs filed by urban development authorities and registrars.
Beginning next fiscal, he may bring in property sales made through power of attorney under the AIRs. This will give insight into large property deals that go un-noticed in the national capital region itself.
Revenue Department is privy to about 17,31,000 ‘high value transac tions’ carried out in the last financial year that are worth Rs 11,07,000 crore. This is the kind of data being vetted by Income Tax Department to nab the tax evaders.
Further, the Supreme Court judgement to make it mandatory for registering all weddings may come handy and provide enough inputs for taxmen to track ostentatious celebrations. The Finance Minister may also an nounce steps to hasten the filing of annual information returns by different states, third party authorities that have been asked to report high value transactions.
Further, the Finance Minister is likely to remove basic telephone connection as a criterion for an individual to file tax returns under the one-by-six scheme launched by his predecessor in the NDA government Yashwant Sinha.
Cell phone has already been removed from the ambit of oneby-six scheme making owners of mobile phones to file tax returns. Following a plea made by Telecom Department, apparently the PMO has accepted the move, sources said.
The other five factors that would make an individual mandatory to file tax returns include owning a property or a four-wheeler, having a credit card or undertaken foreign travel or having high profile club membership.
Sources also divulged that the Finance Ministry has been working on a single return that captures fringe benefit tax as well as income tax by individuals and companies. A simplified common FBT – Income Tax return form on the lines of ‘saral’ is in the offing, divulged a source.
This is part of the Finance Minister’s move to reduce the paper work for companies and individuals on income tax returns and FBT payments. Currently, companies have been made the nodal FBT collection points and also have the responsibility to file a return on the fringe benefits availed by their employees.
Personal taxation Plug loopholes and nab tax evaders Property sales under power of attorney may be captured by AIRs May target persons with Rs 8-lakh pay Ostentatious weddings to be targeted Telephone may be off one-by-six scheme Common tax – FBT return on the anvil.