Over the period of last 20 months, the Indian income tax department has recovered Rs 37,000 crore from individuals who failed to file returns despite having taxable income, as per a report by Economic times.
Income Tax Recovery From Tax Evasion
It appears that the Indian Income tax department has recovered ₹37,000 crore over the last 20 months from individuals who were not filing returns despite taxable income, according to the officials.
Basically, they have found discrepancies in their analysis of high-value transactions like property and luxury purchases.
This is made possible with a stricter tax collection system which aids in tracking these transactions.
Further, leading to recoveries, including ₹1,320 crore from those engaged in high-value deals.
There were instances of individuals filing returns declaring zero income despite large spending and tax liability, said the official.
How Did This Happen?
In their data analysis on high-value transactions which include purchase of gems and jewellery, property and spending on luxury holidays, the payments were made by cash.
They have done this analysis on data since 2019-20 before reaching out to them.
According to a senior official, “These are the cases where people were not filing tax returns despite making large purchases. The department had reached out to them over the past 20 months.”
It appears that the government has a widened and more stringent tax collection and deduction at source (TDS) regime that has aided in tracking high-value transactions that may have somehow skipped the lens earlier, said the official.
Further adding that there were instances of individuals filing returns declaring zero income despite large spending and tax liability.
Under this initiative, the tax department is running an extensive campaign where it is reaching out to taxpayers who have an expenditure pattern that is not as per income declaration made in their tax returns.
In order to find such people, the government is using data and analytics to detect tax evasion.
They have deployed the Non-Filer Monitoring System (NMS) aggressively since FY21 which identifies such individuals.
Moving ahead, the official said, “Data from multiple sources is being tapped and synchronised… This makes it easy for the department to identify such evasion and nab evaders.”
In the meantime, the Direct tax collections rose 15.4% to ₹12.10 lakh crore during April-November.
It included corporate tax of ₹5.10 lakh crore and non-corporate tax of ₹6.61 lakh crore, as per the official data.
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