In a significant move to crackdown black money, the Income Tax department is planning to pursue those property-holders who have never filed income tax returns. The department suspects that these may be benami holdings on behalf of people looking to conceal their wealth.
The findings have emerged from the analysis of vast amounts of data that the government has collected recently. “We have a lot of data from various sources including on investments in property by people who have never filed returns,” said an income tax official.
This information will be verified to ascertain the source of income used for the purchase of the properties and to see if these are being held by benami owners.
Reportedly, Enforcement action will be taken only in cases where there is concrete evidence. Otherwise, tax authorities will follow a non-intrusive approach. In some instances, the properties purchased exceed the income declared and in others, no income tax return has been filed.
Spending and investment data are used to create profiles of individuals and matched with incomes declared in returns. Aside from this, more than 550,000 people have been identified for further probe as part of the second phase of Operation Clean Money for having deposited cash incommensurate with their declared income.
Reports said that the Government is also targeting the individuals who have carried out property transactions after demonetization. Following this, the department had also launched Operation Clean Money through which it identified 1.8 million persons for everification of large cash deposits.
The department has now moved on to phase two of the operation, which also includes a crackdown on benami properties.
The Benami Properties (Prohibition) Act empowers the income tax authorities to confiscate and prosecute both the depositor and the person whose illegal money he or she has “adjusted” in their account. It attracts a heavy fine that could be as much 25% of the fair market value of the asset and rigorous imprisonment of up to seven years.
