The central government has been continuously extending the deadline for linking PAN cards with Aadhaar. Now the Income Tax Department is in the mood for action. About 18 crore PAN cards can be canceled due to non-linking with Aadhaar by the deadline of 31 March. The two departmental officials, on the condition of anonymity, said that now the Income Tax Department is equipped with Artificial Intelligence, so it is ready to take action against those who conduct high-value transactions using multiple PANs.
He said the government could expand the list of high-value transactions to track the spending patterns of unscrupulous people who spend large sums of money on luxury but avoid paying taxes citing their income as low.
The IT law provides details of financial transactions (SFT), formerly known as an annual information return (ITR), to track fixed high-value transactions made by taxpayers. The department receives details of such expenditure through banks, financial institutions, mutual funds, credit card companies and other institutions.
An official said, “It is surprising that out of a population of 130 crore, only 1.5 crore contribute to income tax. Prime Minister Narendra Modi had also pointed this out recently. The available data suggest that there is an urgent need to expand the tax base. ”
On 13 August, PM Modi unveiled India’s first charter about the rights and duties of taxpayers and appealed to the public that only 1.5 crore people pay income tax in a country with a population of 130 crore.
An official said that as of June there are 509.5 million (50.95 crore) PAN card holders in the country, but only 64.8 million (6.48 crore) of them file income tax returns (ITR) and only 1.5 crore actually pay income tax. He said, “Around 4.98 crore people file ITRs. But they either show zero tax liability or claim the full amount of tax paid through ITR. ”
Another official said that some unscrupulous people use multiple PAN cards to hide their high value transactions and manage to keep themselves out of the tax net. As a result, only 32.71 crore PANs are linked with Aadhaar. Until the Aadhaar link is made before the March 31 deadline, more than one-third of the PANs may come under the scanner.
Naveen Wadhwa, Deputy General Manager, Tax Consultancy Taxman, said, “If PAN has not yet been linked to Aadhaar, there is a possibility of getting multiple PANs. However once PAN is linked to Aadhaar it will not be possible to get multiple PANs. ”
The official said the PAN and Aadhaar linkage will help the tax authorities to keep an eye on tax evaders who show no taxable income, but are looking for luxurious items such as buying vehicles, investing in real estate, traveling abroad and Putting money on tasks like buying jewelery. The officer said The government can expand the list of high-value transactions that the IT department tracks.
According to another officer, this list includes payment of education fee of more than Rs 1 lakh per annum, electricity consumption of more than Rs 1 lakh per year, domestic air travel in business class, jewelery of more than Rs 1 lakh or items of legal value. May include purchase, payment. Property tax in excess of Rs 20,000 per year, life insurance premium of more than Rs 50,000 and health insurance premium of more than Rs 20,000 can also be included.
The official said that these details would, however, be collected only from third parties and honest taxpayers would not be required to provide expense details in their ITRs. “The proposed step is to bring tax evaders under the tax net and not to harass honest taxpayers, as they are not required to file details of high value transactions in their ITRs,” he said.
Giving the example of a person who paid a school fee of Rs 5 lakh per annum, including donations without paying any tax, he said, “Trying to dodge the I-T system by claiming that his income is not taxable.” Has been doing. Similarly, a person, who has shopped for luxury items or has spent a large amount for hotel bills, is a potential taxpayer and should file his ITR. ”
The official said, “PAN-Aadhaar will eliminate the possibility of having multiple PANs with the link. This will eliminate willful tax evaders. Aadhaar is designed in such a way that duplicate cards cannot be issued. Also, the pan-Aadhaar linkage will eliminate fake or multiple PANs held by the same person in various fake ways. ” Wadhwa also said that the government’s proposed move to expand the list of expenses will not cause any inconvenience to honest taxpayers.
