New Delhi, Jul 30(PTI): The Income Tax department has listed eight cities in which it will start tracking high-value personal expenditure in malls and markets, interest earned on investment, purchase of luxury vehicles and capital gains made from sale of property.
The Central Board of Direct Taxes (CBDT) has tasked its Directorate of Intelligence & Criminal Investigation to launch the pilot project in Bangalore, Chennai, Calcutta, Pune, Kochi, Lucknow, Bhopal and Guwahati for ”widening and deepening the tax base”.
The department will customise its search based on trends in each of the metros and Tier-II cities. So, in Guwahati, it will focus on high value personal expenses and payments made in shopping malls and other market avenues, fees paid in coaching centers and educational institutions and purchase of residential properties.
In Chennai, it will track the money flowing into the lucrative sand mining and timber import businesses.
In Bangalore, the deparment will track interest earned by a person from investments made in Urban Cooperative Banks (UCBs), corporate bonds and Cooperative Credit Societies.
The CBDT and the I-T worked out that strategy at the recent conference of Chief Commissioners and Directors General in Delhi.
“Revenue collection under the direct taxes regime is a challenging task. Keeping in mind the government's intention of providing a non-adversarial tax regime the department has decided to run this pilot project to ensure that no source of revenue is left untapped,” sources privy to the development told PTI.
”This is just a pilot project and many more economic expenditure indicators in various other cities would also be taken up in a confidential manner,” he said.
The department will electronically track capital gains made from the transaction of sale of transfer of development rights in Maharashtra's economic powerhouse Pune, capital gains made from the sale of immovable assets in Madhya Pradesh's capital Bhopal, and sales of luxury cars and SUVs in Lucknow.
In Kochi, Kerala, the focus will be on the houseboats business, as well as capital gains from land sold to an ambitious seaport project of the state government.
In Calcutta, the taxman will track expenditure on the production of film and television serials including similar content being made and sold across various media platforms.
Sources said the selection of the cities was made on a random basis and learning from experiences of similar technical data gathering exercises done by the directorate during the 2013-14 fiscal.
The Directorate of Intelligence & Criminal Intelligence acts as the income-tax department’s in-house intelligence gathering, analysis and dissemination wing, getting confidential business and financial data from banks, financial intermediaries and investigation intelligence of the central department.
During 2013-14, the unit undertook various special projects with an aim to widen the tax base and in one such operation it was found and reported that an “interest income of Rs 6,181 crore spread over 3,84,112 persons” had initially escaped assessment due to non filling of I-T returns or non declaration of interest income in ITRs or showing less income in ITRs.
The department, however, later tapped this leakage by making use of its legal enforcement measures as provided under the Income Tax Act.
Undertaking a similar project in the last fiscal, the tax department also detected an undeclared income of Rs 75.61 crore after 739 people filed their revised ITRs in response to query letters sent by the assessing officers to these individuals, which was based on data gathered through technical and electronic means.