High-value deals to face I-T scrutiny

The next time you buy a car or invest in shares, be warned: Big brother will get to know all. Revenue authorities are set to track your purchases through your dealer or stock broker who, in turn, will be required to file an annual information return.
Information returns are essentially declarations filed with the tax administration by persons required to report details of their financial dealings with other taxpayers. It requires listing of transactions — like payment of corporate dividends, sale of cars or transactions of other kinds beyond a prescribed ceiling.
The idea is to keep tabs on high net worth individuals. Taking a cue from the recommendations of the Kelkar Committee on Direct Taxes, the Finance Bill 2002 has now proposed inserting a new section in the I-T Act on the furnishing of annual information returns. u Related report on P 6
The return would have to be filed by an assessee who enters into a financial transaction with any other person during any previous year. Already, the department has made it mandatory for assessees to quote the PAN number for designated transactions. Now, the onus would be on the seller to mandatorily provide such information in his annual information return.
The revenue department will prescribe the nature and value of transactions for which annual information returns would have to be filed after the Finance Bill is passed by Parliament. The amendment is proposed to be made effective from April 1, ''04.