I-T dept starts tracking visitors to tax havens

The department has focussed its intelligence and investigation scanner on all such travellers who have visited tax haven nations last year and have not disclosed the expenditure and instances of such tours in their Income Tax returns.

The drive by the I-T department assumes importance in the backdrop of the clamour to unearth blackmoney which is suspected to be stashed away essentially in such nations with taxpayer friendly laws -- called tax havens -- thereby encouraging people to hide their ill-gotten wealth in secret lockers of these countries.

The Air Intelligence Unit (AIU) of the department has liaised with the civil aviation authorities to obtain the travel details of all such travellers from various airports of the country and other locations.

The department has subsequently fed this information in its exhaustive computer-based anti-tax evasion database of taxpayers which has been developed by the Centre for Development of Advanced Computing (C-DAC).

In the initial step of the larger operation to check tax evasion, the I-T department has tracked about a thousand such individuals who had travelled extensively to these destinations in about 20 lakh air trips.

The department, according to sources, has found that a number of such travellers' details do not match with their declared intentions to visit these nations.

"Such trips could have been made by certain individuals to strike business deals here for
routing and stashing blackmoney. Assessees who have not explained such instances will be asked to furnish information to the department," a senior I-T department official said.

I-T sleuths suspect some fliers could also be fronts for some individuals who themselves did not want to get into the limelight as then they would have to reflect such trips and their expenditure in their I-T returns.

These people are the ones who do not file their I-T returns and easily escape the scanner of income tax department and other enforcement agencies, the officer said.

The department would also forward such details to other enforcement agencies like the Enforcement Directorate (ED), the Directorate of Revenue Intelligence (DRI) and the CBI to take action according to their mandates of checking money laundering, forex violations and other corrupt practices.

The I-T department, as part of its measures to check blackmoney, has set up two overseas income tax units in Singapore and Mauritius recently while eight more such units will soon be activated in the US, UK, Netherlands, Japan, Cyprus, Germany, France and UAE.

The government is also working to sign revised tax agreement treaties (Double Taxation Avoidance Agreements) with additional clauses with many countries and Tax Information Exchange Agreements (TIEAS) with almost 18 tax haven nations.

Six TIEAs with countries like Bahamas, Bermuda, British Virgin Island, Cayman Island and Isle of Man have already been inked.

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