New Delhi, Jul 30: In order to widen the tax base and check undisclosed income, the Income Tax Department has decided to train its scanner on instances of personal expenditure, interest earned on investment, purchase of luxury vehicles and capital gains made from sale of property in a select band of economically surging Indian cities.
The Central Board of Direct Taxes (CBDT) has tasked its exclusive technical snoop unit– the Directorate of Intelligence and Criminal Investigation to initiate a pilot project in 8 metro and tier-II cities of Bangalore, Chennai, Kolkata, Pune, Kochi, Lucknow, Bhopal and Guwahati for “widening and deepening the tax base”.
So, while the taxman will analyse high value personal expenses and payments made in shopping malls and other market avenues by an individual or an entity, fees paid in coaching centers and educational institutions and purchase of residential properties in Guwahati, their counterparts in Chennai will track the money flowing into the lucrative sand mining and timber import businesses in Tamil Nadu.
Similarly, in Bangalore the tax sleuths will track interest earned by a person from investments made in Urban Cooperative Banks (UCBs), corporate bonds and Cooperative Credit Societies. The decision to undertake these projects was recently formulated by the top brass of the CBDT and the I-T department during the recently concluded two-day conference of Chief Commissioners and Directors General of the department in the national capital.
“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.