World Cup semi final: I-T department asks DGCA for ownership details of private jets in India

NEW DELHI: When India's rich and famous descended on Mohali on March 30 to watch the World Cup cricket semi-final between India and Pakistan, they wouldn't have expected the taxman to take notice.

The chaos that day at Chandigarh's small military airport, which saw 65 aircraft—mostly private jets—landing, seems to have made the tax sleuths sit up and take notice. The Income-Tax Department has asked the Directorate General of Civil Aviation for ownership details of private jets in the country.

It has also sought information from the Directorate of Revenue Intelligence on Customs clearances given to aircraft, luxury yachts and flashy sports cars.

"Despite an increase in possession of such items, wealth tax collections have largely remained stagnant over the past several years," an I-T Department official said, explaining the rationale for an investigation.
"We believe there is a need for a deeper investigation on this count," he said.

The fast-growing Indian economy has seen the emergence of a large number of billionaires who can afford such luxury items. There were 335 private planes in India in 2006—170 fixed-wing planes and 165 helicopters. In 2010, the number rose to 552 —270 fixed-wing planes and 282 helicopters.

The Income-Tax Department will closely monitor wealth-tax and income-tax returns of individuals who own private jets, yachts and sports cars. The department will use the data on such purchases in its drive against black money.

The department will also scrutinise returns of companies that own high-value luxury items as it has come across instances of high net-worth individuals purchasing aircraft through their companies.

There has been a spurt in sales of items such as residential houses, farm houses, urban land, jewellery, bullion, cars, planes and yachts in recent times.

The Department of Revenue Intelligence's investigation had unearthed a car import scam recently. A detailed investigation will help the department unearth unaccounted wealth, if any. Wealth tax is levied on 'unproductive' assets at the rate of 1% on wealth in excess of Rs 30 lakh.

Earlier, the tax was levied on all forms of wealth, including shares, bank deposits, fixed deposits, bonds and debentures. The regime was changed from assessment year 1993-94 to encourage investment in productive assets.