The Telegraph
Since 1st March, 1999
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Taxman to keep tabs on lifestyle

New Delhi, July 26: Affluent and a non-salaried taxpayer' Beware. The finance minister is watching.

Finance minister P. Chidambaram has asked the taxman to heft the axe and go after the rich non-salaried class to stop tax evasion and work out a plan to recover direct tax arrears that run into more than Rs 87,000 crore.

Chidambaram, who was speaking at the annual conference of chief commissioners and directors-general of income-tax here today, said a sizeable amount of the Rs 87,675-crore of direct tax arrears was undisputed and recoverable.

Chidambaram asked the taxmen to look into “lifestyle expenditures” and trace those transactions to find potential non-salaried taxpayers. He said the number of cars is far more than the number of people paying taxes. Moreover, there has been a spurt in the number of people owning high-end cars costing Rs 5 lakh or more.

The finance minister said that clearly a large number of people are buying airline tickets, luxury cars and expensive watches worth lakhs of rupees. If so many people can afford such a lifestyle, why are they still out of the tax net, he asked.

In an unusual decision, journalists, who were invited to cover the inaugural meeting, were asked to leave the conference hall before the minister’s speech.

Chidambaram said the government wanted to put in place a proper procedure at the chief commissioners and income-tax appellate tribunal levels to collect a tidy sum of about Rs 7,000-8,000 crore which was easily recoverable.

The minister said he would approach the Chief Justice of India and the chief justices of high courts to take up big tax cases quickly. A media campaign is also proposed as part of a multi-pronged approach to recover arrears.

The tax department is planning a three-stage approach. Initially, tax authorities will issue notices to companies and individuals who have not cleared arrears. Second, they would be called. Finally, if it does not work, the taxmen would go after them.

Chidambaram asked taxmen to beware of “friends” using his name or that of minister of state S.S. Palanimanickam to seek favours. He said that in such instances, the taxmen could talk to him directly.

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