While Indian athletes may have failed to win more medals in Rio Olympics, the Income Tax Department has not let down the Modi Government. While the whole countrys focus is on GST, the IT Department has also been on its toes this year. In the first seven months of this year alone, IT Department has conducted around 148 IT raids which is almost thrice the number of raids conducted last year during the same period. Not just the count, but also the total assets seized during these raids has experienced a mammoth jump. In 148 IT raids conducted, IT Department has seized over Rs. 330 Crores of alleged black money in the form of cash, jewellery, and other assets. This figure stood at Rs. 102.5 Crores in 2015 during the same period.
Official Report accessed by PTI
After some seriously busy months from January to July, IT Department prepared an official report on IT Raids conducted during these months to assess the progress. This report was accessed by Press Trust of India (PTI) and as they report, Income Tax Department this year has beaten all the records of past five years in terms of a number of raids conducted. The Investigation directorate of Central Board of Direct Taxes (Investigation wing, CBDT) has further issued strict instructions to step up these actions to unearth instances of domestic black money and go into “all the usual and unusual sectors.
Who are the alleged offenders?
IT Department has not targeted any sector in particular. Cases, which made the news, were the raids conducted in jewellery shops in Zaveri bazaar in Mumbai (among many such jewellers and traders across Maharashtra), the former Electricity Minister of Tamil Nadu, the offices, and residences of an infrastructure company, a premiere ice cream parlour chain in Bhopal, hospitals in Hyderabad and Jalandhar, banks, finance companies, etc. No sector has been spared. Amongst the sectors considered worst hit by these raids were construction, education, medical, pharmaceuticals, and infrastructure sectors.
Even Khau-galli vendors have not been spared
One of the reasons why income tax collection has not been very effective is because the small traders and vendors with handsome earnings do not pay or pay very minimal taxes. The Income Tax Department too has not been very strict with them because of lack of information. But not anymore, amongst the recent targets of IT Raids, were the vada pav vendors, the dosa wallas, jalebi stalls, sandwich centre and any other kind of fast food vendor in popular khau-gallis. These vendors deal in cash and therefore, it is difficult to track them down, while it is an open fact that most of these vendors earn more than an average salaried person. These vendors who would have never even seen an income tax officer before, are now dealing with full-fledged Raids.
Why a sudden rise in IT Raids?
While there isnt any official reason for the increase in IT Raids, but we can certainly speculate. As per law, IT Raids are conducted on the basis of information. But It cannot happen that all of a sudden, Income Tax Department has started receiving information from different sources about different people from different sectors. Besides, the number of raids substantially increased with the last date (30 September)of declaring black income under Income Declaration Scheme (IDS). So, if one connects the dots, the intent of the government is quite clear that is to generate fear in the minds of tax evaders who would then declare their black money under IDS scheme.
However, the number of tax evaders in India are so huge that even an IT force 10 times larger than the current size, would find it difficult to conduct raids on all evaders. That was the very reason why IDS scheme was introduced in the first place.
Conclusion
Taxes are your contribution towards running the government, who in turn, takes care of your security and ensures your comfort in the form of public amenities. Paying your taxes honestly is your bit of contribution to the process of Nation building. While creating fear and panic amongst tax evaders to ensure their participation in IDS scheme, maybe the intent of IT Department, but IDS in the true sense was a grand opportunity to come out safe from legal hassles in future. From Nation building perspective, IT departments recent work is plausible and a step in the right direction.
[text-blocks id=”notice”]