Monday, October 31 2005 16:33 Hrs (IST) - World Time -

Chennai: Hinting at action against income tax evaders, Union Finance Minister P Chidambaram today (Oct 31, 2005) said many high net worth individuals, who had stopped filing IT returns, and a large number of non-filers of IT, were under the scrutiny of the Income Tax Department.

"Paying income tax is a matter of pride. You could hold your head high. It is a badge of respect and honour", the Finance Minister told reporters, after filing his IT returns at the Income Tax Office 'Aaykar Bhavan' here.

Chidambaram said many top filers of income tax in the past, have stopped filing IT returns. "They have been top filers of income tax for a few years", he said, adding that these individuals (mistakenly) think that they could 'get away' as they were top filers of IT in the past.

There were also a large number of people, who have not been filing returns at all. "These stop-filers and non-filers are under the scrutiny of the IT Department", he said.

Chidambaram also expressed the confidence that the direct tax collections as a percentage of GDP would cross five per cent at the end of this financial year, in line with the budget forecast. "Last year, the direct tax to GDP ratio stood at four per cent", he pointed out.

He said a combination of factors such as economic growth, better corporate results, higher salaries, more information about the tax assesses, tighter administration and Annual Information Report (AIR) have contributed to this optimism.

Commenting on the high FII (Foreign Institutional Investments) outflows, Chidambaram said, "inflows and outflows are part of the capital market", adding a large amount of money from Tokyo, Singapore, Hong Kong and Middle East, were waiting to enter India.