Early this month, FM Pranab Mukherjee had okayed the setting up of a high-level multi-disciplinary panel to study black money at home and abroad, and another panel to suggest counter-measures against tax havens. These actions are likely to reflect in the Budget for 2011-12.
The ITS enables field officials to view the current assets of HNIs and gives them access to information like the assessee’s recent investments in MFs and shares and other expenditure. The details are compiled by using annual information reports from banks and other financial institutions. As part of ITS, dossiers of at least 550 HNIs are prepared and circulated to field officials. Considered an effective tool to keep track of high value transactions of HNIs, the ITS empowers officers with relevant information on movable and immovable assets of the assessees. The tool is currently being used to recover tax arrears from HNIs.
At a pre-Budget review meeting held with senior CBDT officials recently, the FM had directed them to “deal with the issue of black money and illicit assets parked abroad on priority”. Mukherjee told the officials to chalk out strategies to broaden and deepen tax base and also increase the contribution of HNIs to the exchequer.
The next Budget may have some surprises for moneybags, with the CBDT contemplating additional levies for this category on their wealth. A senior CBDT official said plans were afoot to revise certain guidelines for dividend and wealth taxes and impose additional duties on luxury spend.
Mukherjee has directed the CBDT to reconstruct some of the levies in such a manner that HNIs are taxed more for their higher earnings and conspicuous consumption. The finance minister, an official said, had expressed his unhappiness over the rising gap between the rich and the poor, and urged officials to ensure that those who had plenty of disposable income were taxed more.