I-T now trains guns on FDs, plans despositor database
After annual information returns (AIR) to track high spenders, the finance ministry has firmed up rules for another anti-evasion measure aimed at pinning down scores of those who earn interest on their fixed deposits, but fail to report this while...
By Hema Ramakrishnan, TNN |
PUNE: After annual information returns (AIR) to track high spenders, the finance ministry has firmed up rules for another anti-evasion measure aimed at pinning down scores of those who earn interest on their fixed deposits, but fail to report this while filing their tax returns.
Public sector companies, banks and co-operative societies will have to mandatorily provide information on depositors who earn interest income of less than Rs 5,000 a year, before the expiry of one month after the end of every quarter. Currently, tax is not deducted at source if the interest income on fixed deposits is less than Rs 5,000 a year. But revenue authorities reckon that the scope for evasion is huge as depositors split accounts to avoid paying tax.
Rules are now in place to operationalise the legislation. Details like the depositor’s name, his permanent account number (PAN), address, interest accrued and date and reference number of the fixed deposit have to be provided. PAN number will be optional. Senior officials said that tax authorities will deal with these returns in the same manner as the AIR.
Credit card companies, for instance, will provide details of those who run up bills of over Rs 2 lakh a year. The tax information network — which is PAN number-based — will collate this information party-wise in one account.
Authorities will use the data collated by TIN to check whether the individual has filed income tax returns. While considerable groundwork has been done for processing of AIR, tax authorities are yet to figure out how they would use the voluminous data that would be available on interest income received by depositors.
Public sector companies, banks and co-operative societies will have to mandatorily provide information on depositors who earn interest income of less than Rs 5,000 a year, before the expiry of one month after the end of every quarter. Currently, tax is not deducted at source if the interest income on fixed deposits is less than Rs 5,000 a year. But revenue authorities reckon that the scope for evasion is huge as depositors split accounts to avoid paying tax.
Rules are now in place to operationalise the legislation. Details like the depositor’s name, his permanent account number (PAN), address, interest accrued and date and reference number of the fixed deposit have to be provided. PAN number will be optional. Senior officials said that tax authorities will deal with these returns in the same manner as the AIR.
Credit card companies, for instance, will provide details of those who run up bills of over Rs 2 lakh a year. The tax information network — which is PAN number-based — will collate this information party-wise in one account.
Authorities will use the data collated by TIN to check whether the individual has filed income tax returns. While considerable groundwork has been done for processing of AIR, tax authorities are yet to figure out how they would use the voluminous data that would be available on interest income received by depositors.
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