The Central Board of Direct Taxes (CBDT) may tense the loop on high-value spenders such as those going on extravagant foreign travels, paying excessively high electricity bills, purchasing designer clothes, taking service from fertility clinics, etc., as part of its plan to broaden the tax base. The aim is to widen the taxpayer base by 10 percent to about 86 million in FY24.
An elaborate central action plan is in the works on tax-broadening measures such as scrutinizing statements on specified financial transactions by reporting entities in the case of high-value purchases, tightening the organized collection of data from various agencies and third parties, and proper checks on statements on tax deducted at source/tax collected at source by certain entities, among others,” a government official told Business Standard.
Tax net after demonetization
High-value transactions came under the tax net after demonetization, with the tax department, through data analytics, identifying potential non-filers who did high-value transactions in 2017-18 (the year after the note ban) but did not file tax returns.
A draft of the plan will be submitted to the CBDT this week for approval, and is likely to be effective this month itself, officials said.
Also, read about the Adani conglomerate’s aims to raise about $800 million for financing green energy projects.
The plan is learned to have suggested a verification mechanism to see to it that entities mandated to report specified financial transactions or related matters ensure that they are compliant with tax provisions.
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