Now, I-T officers can access banking databases to catch defaulters
It is now impossible for the tax defaulters/evaders to escape from the clutches of the Income Tax Department, as the Centre has amended the I-T rules, empowering the tax authority. I-T officials can now reach "hiding" or "untraceable" tax defaulters by accessing their addresses in the banking/insurance/municipal corporation databases to issue notices or summonses regarding due taxes and extract them. Find out more!
I-T Dept had access to limited address databases
Until now, the I-T Department could only use the address provided by taxpayers in their PAN (Permanent Account Number), the income-tax return filings, or other tax-related things. But the existing databases under the previous rules were not helping in reaching the tax defaulters either when the taxpayer genuinely changes the address without notifying or when someone purposely goes into hiding for evading taxes.
Amendment in I-T rules notified on 20 December
A senior ITD official said the amended rules were notified recently after Finance Ministry's approval. The amendment allows tax authorities to obtain and use taxpayers' addresses available with "banking company or cooperative bank, India Post, insurance company, the returns of agricultural income, and the statement of financial transactions (SFT)." It also includes addresses available in the "records of the government," the official added.
What are the records of the government?
Addresses in the government's records include all the addresses the taxpayers have provided while registering for a driver's license, voter ID, or with local authorities like municipal corporations and other similar departments. The amendment was made by the Central Board of Direct Taxes.
Why was the amendment necessary?
The official said amending the I-T rules was necessary as the tax department was unable to trace the defaulters "in a number of cases where taxes worth crores of rupees are stuck." Sometimes assesses genuinely change addresses without notifying authorities or intentionally go into hiding or absconding to evade tax. But now ITD has multiple options to get hold of untraceable or hiding defaulters.
Defaulters cannot hide from tax authorities
The tax official said, "The aim is to ensure that due government revenue is not usurped and defaulters are caught, penalized, and prosecuted." So, the I-T Department can still find defaulters even if their address is different from what was provided in PAN/ITR filings.