In vitro fertilization (IVF) clinics, designer clothing stores, and NRI quota medical seats are on the Income Tax Department’s radar for tax evasion.

This is part of an initiative to ‘widen and deepen’ the tax base under the Central Action Plan for the current fiscal, 2023-24 (FY24), officials said.

The IVF business is growing rapidly and the treatment charges for this route to giving birth to a child varies between Rs 70,000 and Rs 4 lakh, with some branded clinics charging even higher than Rs 4 lakh.

Similarly, the fee for NRI quota seats varies from institution to institution and even from region to region. However, the minimum fee could be in the range of Rs 18–22 lakh per annum.

The price tag of designer clothes is difficult to estimate.

Also read: ‘Big moves’. Income Tax Department’s FY24 interim action plan calls for immediate action on outstanding demand, refund approval

Under the Income Tax Act, the sale/ purchase of goods or services exceeding Rs 2 lakh in cash has to be reported through SFT-013. “While examining such reports, it is noticed that the circumvention of these provisions is widely prevalent,” an official told businessline. Further, although Section 139A of the IT Act requires PAN to be provided or obtained in specified transactions, there is no reporting or verification mechanism to determine compliance with this obligation, he added

“In any case, high-value consumption expenditure needs to be verified with information about the tax payer, available with the department. Therefore, it is imperative to identify the sources that could be involved in possible circumvention, such as hotels, banquets, luxury brand retailers, IVF clinics, hospitals, designer clothing stores and NRI quota medical college seats,” another official said. Further, he said officials have been advised that such sources will have to be identified and a verification exercise could be conducted by calling for information in a non-intrusive manner.

Another tool for widening and deepening the tax base is validation of PAN (Permanent Account Number). As on March 31, 2023, around 38 lakh PAN cards had been issued. The law provides for compulsory quotation of PAN for transactions such as buying an automobile or investing in mutual funds. Now, if one does not have a PAN, then he or she has to fill Form 60 while carrying out these transactions.

These forms are submitted to the IT Department. “Efforts should be made to link these transactions with the PAN database. In case PAN has not been allotted to a person, it should be allotted as per the provisions of the Act,” the second official said. The department has also found some institutions were not validating PAN, even if it has been quoted. Now, the plan is to identify such authority by September 30 and facilitate them in carrying out 100 per cent validation by March next year.

There have been concerns on fewer people paying income tax, even as collection through indirect taxes and mainly GST is rising. As GST is a levy of tax on value addition on every transaction of supply of Goods and / or Services up to final consumption, with availability of set-off credit of taxes paid at previous stages, the effort is to look for every possible area of high expenditure, the official said.

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