Income Tax Department Targets Rs 15,000 Crore Evasion Following Hotel, Hospital, and Shopping Bills Investigation
By: Admin | August 23, 2024 | Categories: Income Tax News | 4 Min Read
The Income Tax Department has issued 10,000 reopening notices to companies and individuals across major cities, focusing on discrepancies in reported incomes for the 2018-19 assessment year. This action follows the Central Board of Direct Taxes’ (CBDT) recent directive to closely monitor cash transactions in sectors like hotels, luxury brands, hospitals, and IVF clinics.
Key Highlights:
- Scope of Action: The notices aim to recover as much as Rs 15,000 crore in suspected undisclosed income, involving entities in cities like Delhi, Mumbai, Bengaluru, Pune, Chennai, and Hyderabad.
- Primary Concerns: Many cases involve suspected bogus charitable donations under Section 80G of the Income Tax Act and high-value overseas transactions, such as property acquisitions.
- Deadline: The notices must be issued by August 31, after which cases cannot be reopened for the specified assessment year.
Reopening Provisions:
Recent Budget proposals allow income tax assessments to be reopened beyond the standard three-year period if the escaped income exceeds Rs 50 lakh, extending the timeframe to five years. In search cases, the limit has been reduced from ten years to six years.
Taxpayer Rights:
Taxpayers are given the opportunity to respond to the reopening notices, and in some cases, proceedings may be dropped if explanations are satisfactory. Additionally, taxpayers can file revised returns if discrepancies are deemed genuine.
CBDT’s Broader Strategy:
The CBDT has also directed the tax department to focus on recovering arrear demands, which have risen from Rs 24.51 lakh crore in April 2023 to Rs 43 lakh crore by April 2024. Special teams headed by Principal Commissioners of Income Tax are being formed to address the top 5,000 cases contributing to this demand.
The Board is also leveraging data mining and analytics to identify potential taxpayers, with an emphasis on expanding the taxpayer base through these new insights.
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