Demonetisation helped widen tax net, says IT official

Demonetisation of higher currency notes helped widen the tax net with the detection of large number of tax defaulters including a builder who had not disclosed a transaction of Rs 200 crore, a senior IT official in Karnataka said.

Highlighting the achievements of the IT department in Karnataka during 2017-18, the principal chief commissioner of Income Tax (Karnataka-Goa region) Rajnish Kumar said post- demonetisation, the department had received lot of data and its analysis helped them track many defaulters.

"To be precise, there were 571 cases of deposits above Rs one crore but returns were not filed by the depositors. Now we are after them. Some verification and investigations revealed huge transactions kept away from us," he added.

In one such case, said Kumar, a property transaction worth Rs 200 crore was not disclosed, which was detected. While inquiring about the cash deposit in the bank, the builder agreed that he defaulted the tax and now he has agreed to pay Rs 50 crore, the IT official said.

"While these 571 cases relate to Rs one crore deposits, we have 21,628 cases in this region which are about Rs 10 lakh of high currency notes in those days. They have not filed their return of income. For detecting them we have been carrying out large-scale surveys," Kumar said. These initiatives led to the unprecedented increase in tax collection, he said.

Kumar said, "this will be the first year that the net  collection will exceed Rs one lakh crore. This was the figure  that the countrywide collection had reached in 2004 but in 12  years, Karnataka and Goa region alone have got that figure of  Rs one lakh crore in one year."

He warned that those who failed to file their income tax returns of the two previous years before March 31, this year and defaulted taxes would be prosecuted. The top I-T officer said, "Till now those options (penalising and prosecuting) were seldom used. Now, it has been decided that we will be strict about this and we will prosecute those who are not complying with the provisions."

Kumar explained that as the tax base gets wider, the tax liability comes down. The government will be in a position to reduce the taxes. However, if there is a large evasion then this burden falls on fewer people, especially those in service class.