We’re watching, come clean: I-T to big spenders

NEW DELHI: Even as the last date of the income disclosure scheme (IDS) — a government-provided opportunity for those holding unaccounted money to come out clean — draws closer, the tax department has sent out mails exhorting people to use it and avoid penal action.

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The mails were addressed to people who have made large transactions or investments disproportionate to their sources of income, government officials said. The four-month compliance window under the IDS for voluntary disclosure of domestic black money ends on September 30.

The tax department has sourced information on these people as well as their transactions from banks and property registration authorities across states. “We have been tracking transactions for the last six years, and have records of the ones that do not match the person’s income profile. Mails have been sent to such individuals,” said an official from the tax department of the finance ministry on the condition of anonymity.

The tax department reportedly has a list of over 90 lakh non-PAN transactions. “Please understand that the letter is not intended to offend anybody. It does not even mention the transaction that led to its issuance. We have just advised the citizen to pay taxes if he hasn’t done so on any transaction in the past,” the official said.

The mail ends with a statement that this could be the best time to cough up taxes on undisclosed money and transactions. Banks regularly share data on transactions categorised as suspicious with the government. All transactions of `10 lakh or above in cash are recorded by banks, and shared with various investigation agencies.

The government has already issued a warning that those caught with black money after the scheme ends will face stringent action, including imprisonment. “The tax department has been sending mailers to many as a reminder, and it should not be taken otherwise… Once the scheme is over, those holding illegal money will land in trouble. However, those who have erroneously received the mailers need not worry,” said Manoj Fadnis, former president, Institute of Chartered Accountants of India.

The Narendra Modi government, in line with its electoral promise to crack down on black money, had launched IDS-2016 on June 1. The government is bent on ensuring the success of this scheme, which also found mention in Mann Ki Baat — Modi’s monthly radio address — in June.

Those wishing to avail this scheme would have to pay 30% tax, plus a penalty of 7.5% and a similar 7.5% surcharge — adding up to a total taxation amount of 45%.