In a warning to tax defaulters, Finance Minister P. Chidambaram said a huge amount of data has been mined to go after them and ruled out any amnesty scheme.
“No. In > income-tax , there is no case for amnesty. Because now almost all returns are online except a small category which was exempt. We have a huge amount of data being mined. Therefore, there is no case for amnesty today,” he said in an interview to PTI.
“Best case I can make out is tell people, ‘please don’t hide your income’ Just admit your income and pay tax and be a proud citizen,” he said.
Chidambaram pointed out that no tax burden had been imposed in the Budget on any category of people, other than a “small burden” of a 10 per cent surcharge on the relatively affluent 42,800 people with incomes of over Rs 1 crore a year.
That number was deliberately used to “shock” the nation that there are only 42,800 people who admit an income of over Rs 1 crore, he said.
Voicing the hope that “other measures” proposed to be taken and the “shock” of the number would persuade more people to declare their true income, Chidambaram said that, based on data mining, notices have been issued to 35,000 people, to be followed by more.
“We have the central process cell in Bangalore that processes all income-tax returns using the most advanced software. So, if the information we have from other sources is not matched with the information from I-T returns, that will be thrown up,” he said.
To a question, Chidambaram said there are no estimates on the amount of black income and the number who should be in the net but who are not. But, he said, in a country with 125 crore people, excluding 67 per cent of the people under food security risk and elderly people and children, there would be 15 crore people with incomes in various segments.
“The top 10 per cent should have large income...I think the number must be several times 42,800 who have high income,” he said, adding they may not be earning Rs 1 crore but certainly Rs 75 lakh or Rs 50 lakh.
Vodafone issue
On the contentious Vodafone tax dispute, he said the Government will take a view on appointing a conciliator. “I have told Vodafone that I want a resolution. I told them if you want resolution then make an offer... I want this to be put behind us and move on,” he said.
The Income-Tax Department had issued a letter in January to Vodafone International Holdings BV stating that the company is required to pay a tax of about Rs 11,217 crore along with interest. The British telecom company finally said it wants a resolution, the Finance Minister said, adding the company has offered conciliation.
“I am going to the Cabinet. If the Cabinet gives the go-ahead, we will go ahead for conciliation,” he said. Explaining the nuances, Chidambaram said: “Conciliation, as opposed to arbitration, is non-binding. But that’s a well accepted method of resolving disputes. Conciliators will offer various solutions and the two sides will be persuaded to agree upon any solution.”
Vodafone is facing the tax liability for its purchase of Hong Kong-based Hutchison Whampoa’s stake in Indian telecom business Hutchison Essar in 2007.