Modi Government has announced a huge shift in the Income Tax Administration to make it simple, less hectic and transparent. Expenses like restraint bills over Rs 20,000, purchase of jewelry, white goods which have the cost over 1 lakh, insurance premiums over 20,000, School/College fees of over 1 Lakh, could get a person under Income Tax Scanner.
In a list of proposed measures to widen the tax base, Prime Minister Modi tweeted that ‘government said no taxpayer should be left behind in the drive to ensure better compliance and transparency.’
Though, already expenses such as a purchase of jewelry above Rs 2 lakh is considered to be illegal if PAN number is not quoted and once, these proposed estimates kick in, the scope will be widened additionally, said an Income Tax Official.
According to the tweet, such transactions including others will be a part of the transaction reporting framework of the income tax department. It is recognized that, to include these transactions formally, the Income Tax Department will have to come up with an official notification.
Suggesting, that once the official notification comes in, the financial institutions and other firms may have to present the transactions that are above the prescribed thresholds. The Income Tax Department will then mine the data to identify people, who are making large purchases, but are not paying taxes or filing their tax returns.
The move comes in the beyond of the observation made by Prime Minister Narendra Modi that in a country of 130 crore of population, only 1.5 crore people pay taxes from the category of working class, and such a trend is an alarming situation for the growth of the economy. Government has been constantly working towards expanding the tax base to the burden of taxes on a limited population of the country.
Some of the other initiated transactions to be incorporated under the reporting standards of income tax include:
- Payment of rent above Rs 40,000.
- Payment of educational fee/donations above Rs 1 lakh per annum.
- Electricity consumption above Rs 1 lakh per annum.
- Domestic business class air travel/foreign travel.
- Deposit above Rs 1 crore in current account.
- Expenditure of Rs 2 lakh on foreign travel.
- Payment to hotels above Rs 20,000.
- Purchase of jewellery, white goods, painting, marble, etc. above Rs 1 lakh.
- Deposit/credits in current account above Rs 50 lakh.
- Deposit/credits in non-current account above Rs 25 lakh.
- Payment of property tax above Rs 20,000 per annum.
- Life insurance premium above Rs 50,000.
- Health insurance premium above Rs 20,000.
- Share transactions/D-MAT accounts/bank lockers.
- TDS on cash withdrawal above Rs 1 crore (Rs 20 lakh for non-filers).
- TCS on motor vehicle above Rs 10 lakh
- TCS on foreign remittance under LRS above Rs 7.5 lakh/overseas tour packages.
- TDS on ecommerce suppliers.
- TCS on purchase of goods above Rs 50 lakh.
- Sale of foreign exchange above Rs 10 lakh.
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