I-T plans to pursue property-holders who have never filed income tax returns
Income tax authorities plan to pursue those who have properties in their name but haven’t ever filed income tax returns
on the suspicion that these may be benami holdings on behalf of people
looking to conceal their wealth. The exercise is part of the
government’s crackdown on black money.
The findings have
emerged from the analysis of vast amounts of data that the government
has collected. “We have a lot of data from various sources including on
investments in property by people who have never filed returns,” said an
income tax official. This information will be verified to ascertain the
source of income used for the purchase of the properties and to see if
these are being held by benami owners.
will be taken only in cases where there is concrete evidence, the
official said. Otherwise, tax authorities will follow a non-intrusive
approach. In some instances, the properties purchased exceed the income
declared and in others, no income tax return has been filed.
The tax authorities now have the ability to analyse the data they get from multiple sources to identify evaders.
Spending and investment data are used to create profiles of
individuals and matched with incomes declared in returns. Aside from
this, more than 550,000 people have been identified for further probe as
part of the second phase of Operation Clean Money for having deposited
cash incommensurate with their declared income.
Besides this, some individuals reportedly carried out property
transactions after demonetisation. The government had resolved to put in
place a stringent framework to deal with black money soon after taking
over in May 2014, in line with election promises. It has since taken a
series of measures including the establishment of a special
investigation team on black money and put in place a new law to deal
with undisclosed overseas assets, apart from the benami legislation.
Demonetisation of the Rs 500 and Rs 1,000 notes in November last year
was also pitched as a battle against black money.
income-tax department launched Operation Clean Money soon after the
demonetisation exercise. It identified 1.8 million persons for
everification of large cash deposits.
The department has now moved on to phase two of the operation, which also includes a crackdown on benami properties.
The Benami Properties (Prohibition) Act empowers the income tax
authorities to confiscate and prosecute both the depositor and the
person whose illegal money he or she has “adjusted” in their account. It
attracts a heavy fine that could be as much 25% of the fair market
value of the asset and rigorous imprisonment of up to seven years.