Amnesty beneficiaries may come under taxman's lens

Persons who had made voluntary disclosures in 1997 might face scrutiny

The revenue department will soon take a decision on a proposal to ascertain if those who had opted for the Voluntary Disclosure of Income Scheme (VDIS) in 1997 have filed their tax returns subsequently.

The parliamentary standing committee on finance, headed by BJP's BC Khanduri, proposed that the government should take "particular interest in pursuing those persons who had taken refuge under (the) VDIS scheme in 1997 to make their black money into white and did not file returns thereafter".

"The recommendations of the standing committee are being considered by the Central Board of Direct Taxes and the action taken shall be intimated to the committee shortly," the government said in its reply.

The VDIS 1997 "" which was introduced on July 1, 1997 and closed on December 31, 1997 "" realised around Rs 10,000 crore for the government. The total amount declared was of the order of Rs 33,000 crore, a Comptroller and Auditor General report released in 2000 said.

It said there were 475,477 declarants under the scheme, of which 77,107 were new assessees. Nearly 97 per cent of the declarants under the scheme were individuals and Hindu Undivided Families, while there were 3,109 companies that opted for the scheme, the CAG report said.

The standing committee report, which was presented to the Lok Sabha today, also said the government should take effective measures to unearth hidden incomes.

The government told the committee that it had issued instructions to all Directors General Income Tax (Investigation) to enquire into cases involving significant expenditure on social occasions like marriages.

The move follows the standing committee's criticism that there were only a handful of tax payers with an income of Rs 10-25 lakh who filed returns though a large number of people spent lavishly on social occasions like marriages.

The standing committee also recommended the inclusion of all services, barring a few basic essential ones, under the tax net. It favoured bringing more transactions involving large amount of cash under the tax deducted at source.

It said that the various measures undertaken by the government to widen the tax net might not be sufficient to widen the tax base to 50 million assessees by the end of the financial year.

The government had told the committee that it hoped to increase the number of assessees to 50 million by fully computerising the income tax department and measures such as filing of Annual Information Returns for high-value transactions.

Expressing apprehension that progress was not up to the mark due to poor planning and implementation, the committee said the government should "tread the path efficiently and effectively and expedite the process of covering all the services, except a few basic essentials, under the tax net".