I-T tightens screws on filing of returns

Hyderabad: The taxman is on the prowl, this time armed with a new system that collates data from other sources and gets after those who have not filed their income-tax returns in time. The I-T department is using the Non-filer Monitoring System (NMS) to track those not filing their returns. The system collects information from various sources including municipalities, telecom, electricity department and private agencies to spot people with high income. It checks back with those who have filed returns, and identifies those who have not.

Mr I. Suresh Babu, Principal Chief Commissioner of I-T for Telangana state and Andhra Pradesh, said the system that works from New Delhi passes information on non-filers to regional officials. “We send our teams to identify them in the field to serve notice and to motivate them to file returns,” he said. Based on financial transactions, purchase of luxury goods, payment of property tax, telephone bills, electricity bills and others, the NMS prepares a database of non-filers in five categories.

On priority basis, the NMS passes the information to departments like the Financial Intelligence Unit and Centralised Processing Cell-Compliance Management (CPC-CM). From CPC, the data is sent to regional offices. The Centralised Processing Cell also identifies tax evaders. Mr Suresh Babu said that the I-T department had sent requests to other departments for data on those paying high rates. “We will concentrate on non-filers who already paid more than Rs 2 lakh towards municipal tax, more than '2 lakh towards electricity in a year, telephone bills and so on,” he said.

The I-T department also looks for those purchasing high-end vehicles and luxury goods and those purchasing or selling property. It also looks at bank transactions and data gathered from registered chit funds. “Initially we search for PAN holders from the lists we receive from various agencies and showrooms. We analyse their record in filing returns. If they have not submitted their I-T returns for the current financial year, we send them notices from Delhi,” an I-T official explained.

The Income-Tax Act allow officials to ask for returns within three years from the particular financial year, the source said. The NMS is part of an ambitious project of the Central Board of Direct Taxes that enables the I-T department to use technical data to check cases of non-compliance and non-filers of taxes. It has the entire database of Permanent Account Number (PAN) holders. The CPC analyses reports based on the annual information re-turn, Central Information Branch data and tax deduction at source returns filed by citizens in last financial year.

NMS keeps an eye on financial deals of tax returns non-filers:

The Non-filer Monitoring System (NMS) was set up to identify those with potential tax liabilities who do not file their tax returns. Officials working for NMS analyse data to identify PAN holders who have not filed their I-T returns despite conducting high-value transactions as reported in the annual information return (AIR), Central Information Branch data and TDS/TCS returns.

According to information, the NMS has helped spot nearly 50 lakh non-filers across the country. The system, which was launched for use in 2013, has helped the I-T department collect up to Rs 5,000 crore more per annum. This year, the department expects to earn nearly Rs 7,500 crore more in income tax. The NMS focuses on AIR like cash deposits aggregating to Rs 10 lakh or more in a year in any savings account, payment of  Rs 2 lakh or more against credit card bills, investment of Rs 2 lakh or more in mutual funds, investments of Rs 5 lakh or more in bonds, investment of Rs 1 lakh or more for acquiring shares and purchase of immovable property valued at Rs 30 lakh or more.

It considers the transactions in sale of motor vehicles, transfer of immovable property, purchase of bank drafts of more than Rs 50,000 in cash, share transactions of more than Rs 20,000, payment in connection with foreign travel exceeding Rs 1 lakh at a time and payment to hotel and restaurants exceeding Rs 1 lakh. A source in the I-T department said, “If anyone gets notices for non-filing of income tax returns from CMC, the receiver should understand why they received it. They can submit a return on e-filing portal http://incometaxindiaefiling.gov.in or submit their returns manually at the nearest Aaykar Seva Kendras,” he said.