The Income Tax Department has nailed tax evasion of Rs 1,700 crore (Rs 17 billion) by companies and high networth individuals who had filed tax returns online.

During a verification of electronic returns, the department found that as many as 1,714 taxpayers under the self-assessment scheme (where tax-payers determine their tax liability and pay accordingly) had not paid their tax dues. In a few cases, the amount due was around Rs 100 crore (Rs 1 billion).

The government made it compulsory for companies to file their returns online from 2006.

For other large taxpayers, this was made mandatory from 2007. About 750,000 e-returns have been filed by these two categories so far and they ought to have paid their tax dues by March 2008.

“We printed a list of e-filed returns in which self-assessment tax of more than Rs 10 lakh (Rs 1 million) was shown as payable but not paid. This involves an amount of Rs 1,700 crore,” said Saroj Bala, member, Central Board of Direct Taxes, which administers and collects direct taxes.

The list was sent to all income tax offices in the country and collection has been taken up in right earnest, said Bala. The department has succeeded in collecting about Rs 900 crore (Rs 9 billion).

Bala said the taxpayers perhaps thought the department would not go into the details of electronic returns. Some, she said, might have thought they would get away by paying an interest of 12 per cent per annum (whereas the market rate is 15-16 per cent) on the delayed payment.

This is part of the department’s effort to augment revenue to offset the effect of economic slowdown on direct tax collection.

Among other measures, the department has intensified tax deducted at source surveys and verifications to enforce compliance.

“We have identified sectors or entities who could be defaulters,” she said.

The department has also intensified scrutiny of deductions or exemptions taken by taxpayers under various sections of the Income Tax Act like VIA, 80 IA, 80IB, 10A and 10B.

“Several cases have been reported where deduction and exemptions under these sections have been claimed without meeting the criteria,” she said.

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October 2020