I-T eyes Rs 5 lakh + cars in annual information report

PUNE: The investigation wing of the income-tax department wants revenue authorities to track car purchases of high net worth individuals (HNIs) through the dealers.

An expert committee has recommended making it mandatory for car dealers to file annual information returns (AIR) on purchase of cars valued at over Rs 5 lakh. This would mean bringing mid-segment and luxury cars in AIR net.

The proposal to bring car dealers under the AIR net was, in fact, mooted two years ago. However, it was dropped as it was reckoned that it could impact car sales. The investigation wing has now revived the proposal, albeit with a threshold limit. Cars such as Maruti 800, Indica will not be covered.

A final view is yet to be taken by the Central Board of Direct Taxes (CBDT), said officials. The panel has also recommended changes in the threshold limits of AIR-covered transactions. Mutual funds, for instance, file AIR on unit holders acquiring units of Rs 2 lakh or more.

The suggestion is to halve the limit to Rs 1 lakh. Similarly, companies floating bonds and debentures are furnishing information on individuals who invest Rs 5 lakh or more.

The panel has made a case for lowering the threshold to Rs 2 lakh. In the case of RBI bonds, it has recommended slashing the threshold to Rs 2 lakh from the existing Rs 5 lakh.

Consumers spending more than Rs 25,000 at a time on their electricity bills could also be tracked through a third party — say the state electricity boards — if the recommendations of the expert panel are endorsed by CBDT.