More than 64,000 people declared hidden assets worth Rs 65,250 crore availing the ‘Income Disclosure Scheme (IDS),’ a four month-long window that allowed tax dodgers to come clean or face prosecution.
Finance Minister Arun Jaitley told reporters that 64,275 people revealed assets under the IDS, which allowed people to legitimize concealed income by paying 45 percent tax.
The figures will likely go up after the tax department’s final verification, Jaitley said,
At 45 percent, the government will earn about Rs 30,000 crore from income taxes—more than two-thirds the annual budget of Rs 38,500 crore set aside for the rural job guarantee scheme MGNREGA budget.
The IDS began on June 1 and ended September 30 midnight, and declarants can pay their taxes by December 31.
“The average disclosure was Rs 1 crore declarant,” Jaitley said, implying that most of those who availed the scheme were not small traders but “people with significant resources”.
A similar scheme last year allowing people to declare secret overseas assets fell short of expectations, with fewer than 700 people declaring foreign income and paying Rs 2,500 crore in taxes.
A 1997 amnesty scheme called the Voluntary Disclosure of Income Scheme (VDIS) yielded Rs 9,760 crore in taxes to the government.
Jaitley did not break down the data, but sources indicated that Hyderabad may have topped the list with a declaration of Rs 13,000 crore, followed by Mumbai (Rs 8,500 crore), New Delhi (Rs 6,000 crore) and Kolkata (Rs 4,000 crore).
The Finance Minister said that the tax department has “no intention to be vindictive” as he sought allay fears about a crackdown on those who have availed the income.
The government has indicated that tough action could follow after September 30. Tax evaders face potential stringent penalties – up to 35 percent tax and a 90 percent fine – and up to seven years in prison if they were found to be hiding income.
In July, the income tax (I-T) department had asked 700,000 people who have carried out high-value transactions without quoting their PAN details, to come clean and own-up, or face action.
The tax department has collated 9 million such transactions from 2009 till now, and more than 100,000 of such transactions are believed to be worth around Rs 1 crore.
Under rules, individuals are required to disclose their income tax permanent account numbers (PAN)—a unique 10-digit alpha-numeric code allotted to tax payers–for cash transactions above Rs 2 lakh as also settling hotel bills that exceed Rs 50,000.
Quoting PAN is also mandatory for cash deposits in banks above Rs 50,000, and air tickets and tour package bills worth more than Rs 50,000 among others.
The income tax department has also been collating data on property deals, a source of rampant black money transactions.
Tax officials, sources told moneycontrol.com, have identified, thousands of transactions with “under-reported” property values, where there is a big differences between the declared and market rates.
The I-T department have matched data of “declared value” of property — from the registrar of properties — with “market rates” obtained from private consultancies.