Wednesday, July 13 2005 10:35 Hrs (IST) - World Time -

New Delhi: To combat tax evasion and black money generation, government has brought in five more items for compulsory quoting of PAN to track high-value transactions.

Finance Minister P Chidambaram informed his ministry's Consultative Committee that, application of credit cards, buying mutual fund units, shares, debentures and bonds beyond Rs 50,000 would require quotation of PAN.

Listing out the measures taken to check tax evasion, he said the Annual Information Return, which will be received by the income tax department from this fiscal, will keep track of high value financial transactions.

Information collected on AIR would be used for widening the tax base, he said, adding computerised selection of information that could be used for scrutiny.

Deploying more manpower to avoid tax evasion

The Investigative Wing of income tax department has been strengthened by redeploying manpower to get a greater focus on combating tax evasion.

Strategies have also been devised for carrying out enquiries after doing risk analysis of the type of taxpayers and various business entities.

The Wing was also in the process of developing a computerised data bank on taxpayers.

To facilitate taxpayers, Chidambaram said, large Taxpayer Units are being set up in major cities for offering single window clearance of corporate tax, income tax, excise duty and service tax.

Help Centres for assisting small taxpayers have also been set up, he said.

To track deposit and interest income remaining outside the tax net, Chidambaram said banks and financial companies would have to make a quarterly statement regarding payment of interest less than Rs 5,000 without deduction of tax.

A time limit of 12 months has been provided in the new Taxation (amendment) bill for granting or rejecting charitable institutes waiver of income tax.

More measures on tax deduction at source

It is also proposed to widen the scope of tax deduction at source by including rent on plant, machinery and equipment, royalty and non-compete fee through appropriation amendments in the taxation laws.

This measure would reinforce tax department ability to capture receipts of this nature in the tax net.

Chidambaram said tax recovery officers are proposed to be vested with, limited powers of the assessing officers to facilitate speedy determination of recoverable tax demands.

A separate directorate will start functioning from this month to deal with the Supreme Court including timely filing of special leave petition, proper liaison with councel and Law Ministry and daily monitoring of proceedings before court on direct tax matters.

Regional and national judicial grids are proposed to be set up for ensuring uniformity in dealing with matters before high courts and sharing of information among all chief officials.