Wherever you go, tax dept follows

Officials are relying on both formal and informal methods for reaching non-filers

If you failed to file an income tax (I-T) return for any assessment year in the past and later changed your mailing address without informing the tax department, the authorities might soon be knocking at your door.

With about a fourth of PAN cardholders who were sent letters for non-filing of returns apparently not getting the intimation because of a change in address, the department has started a search operation. The focus is on identifying evaders in eight major cities—Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Bangalore, Hyderabad and Pune.

With every rupee becoming important for the government because of a possible fall in tax collection, it is relying on both formal and informal methods for reaching non-filers. Transaction trails of these people are being monitored. In some cases, neighbours at the earlier address are being contacted. “In many cases, letters were not served because people changed their address. We are making enquiries to take these cases to their logical end. We are expecting substantial success, as most people leave a trail while carrying out transactions,” said an official from the department.

Of 210,000 people who were issued letters in this regard over recent months, in six batches of 35,000 letters each, about 49,500 paid self-assessment tax of Rs 435 crore and about 14,000 paid advance tax of Rs 400 crore by July 31. As some filed returns for more than one assessment year, a total of 220,000 returns have been filed by 1,60,000 people. Of the remaining 50,000, some have not replied; many can’t be traced.

Earlier this year, the Central Board of Direct Taxes had identified 1.2 million taxpayers who had a PAN card but did not file their returns. Based on various parameters, it made seven categories within these 1.2 million non-filers and would gradually send letters to all. The results were thrown up by a project that involved mining and analysing taxpayer data with the department.

Asked whether the tax department was concentrating on big fish, the official said those could be on the priority list but others were not spared, too.

"We are touching everybody; the question is priority. Our main focus is eight big cities but we are keeping an eye on non-filers in other regions too," he said.

A compliance management cell has been set up to monitor return filing and tax payment of the target segment. This information is now being made available to the jurisdictional assessing authorities through the online monitoring system for verification and issue of notices in relevant cases.

While 140 million people have a PAN card each today, in India - a country of 1.2 billion people - there are only 34 million taxpayers. Many people who don't file return get a PAN as it works as an identity proof at many places. About 13-14 lakh new PAN cards are issued every year by the tax department and details of just 0.2% applicants (200 per one lakh) are verified by it.