Taxman trains focus on big spenders in 8 cities

If you’re in Lucknow and planning to buy a luxury car, or going on a spending spree in a Guwahati mall or thinking of splurging on a houseboat in Kochi to indulge in your aquatic fantasies, you may well become a person of interest for the Income Tax Department.

As part of a pilot project, the Directorate of Intelligence and Criminal Investigation has been asked to collect information about big spenders in specific categories, across eight cities.

Chennai, Kolkata, Pune, Lucknow and Bhopal are the other cities covered by the project. The categories and cities have been picked up randomly by the tax department.

A decision to this effect was taken in a meeting between Finance Minister Arun Jaitley and key income tax officials last week. The move is ostensibly aimed at tackling tax evasion as well as widening and deepening the tax base during the current fiscal year. The Directorate is entrusted with collection, collation, verification and dissemination of such information.

Such special projects are not new for the Tax Department. Last fiscal, in a different project, the Directorate had found cases of significant tax evasions.

It had collected information on cash above ₹5 lakh deposited by members/depositors in savings bank accounts with Urban Co-operative Banks and Co-operative Credit Societies and interest above ₹10,000 paid by these entities during three financial years: 2010-11, 2011-12 and 2012-13.

Analysis of data based on Permanent Account Numbers showed that interest income of ₹6,181 crore earned by 384,000 persons had escaped assessment due to non-filing of income tax returns or non-declaration of interest income or the reporting of lower income.

It also showed that around 16,000 persons, having interest income above ₹2.50 lakh, had not filed returns or not declared interest income or shown lower income.

All together, income worth ₹4,442 crore went un-assessed. The Government’s direct tax mop-up target of ₹7.36 lakh crore will require a growth rate of over 15 per cent in collections, and further action has been planned to get the money.

Under the pilot project, in Guwahati, tax sleuths will collect information related to high personal expenses, whether it is in shopping malls, educational institutions, coaching centres or on homes.

In Kolkata, expenses incurred by film/television serial/media content producers will be under observation.

For Chennai, projects involving sand mining and timber imports in Tamil Nadu have been identified while for Kochi, new projects include houseboats and capital gains on land sold to the Vizhinjam International Seaport.

Purchase of luxury cars and SUVs will come under the scanner in Lucknow and capital gains on the sale of immovable properties will be looked at in Bhopal.