Professionals are under Income Tax scanner after Mumbai-based lawyer disclosed income of 7.50 Crore

Mar 6, 2010 Income Tax

Mumbai based lawyers, doctors and film professionals are

under Income-Tax department scanner, the department is

planning to carry out a series of raids on such professionals,

on grounds of incomplete disclosures. 

According to people familiar with the development,
the department got into action after reports that a low-profile
Mumbai-based lawyer had an unreported income of Rs 8 crore
in his bank account.

The I-T department learnt of the account after the
bank informed the department about the interest
accruing to the lawyer had totalled over Rs 60 lakh.
Under norms, banks are required to report to the
Income-Tax department on any interest payment that crosses Rs 10,000.

On inquiry, the tax officers discovered that the lawyer,
in his tax returns had disclosed his annual income to be about
only a few lakhs. Following this, the assessing officer summoned
the lawyer and directed him to file a revised return.

The lawyer revised the return disclosing an income of Rs 7.5 crore.
“This was the eye-opener for the department, which then decided
to closely track other professionals such as doctors and film actors,”
said the person familiar with the developments.

Simlarly, reports received by the department also suggested that
several doctors, whose incomes run into crores of rupees,
don’t make full disclosures. Results of raids on city doctors
carried out in the recent past corroborated this information.
Recently in a raid conducted at Vile Parle in January, I-T sleuths
unearthed over Rs 7 crore from a doctor, who was specialising in
weight loss treatment to celebrity clients.

Several Bollywood professionals, mostly actors and technicians,
besides distributors and producers, are also reported to be avoiding
full disclosures of their income.
This is despite the fact that some actors earn huge fees and
revenues, if the film they worked for, turns out to be box-office hits.
Vidhu Vinod Chopra offered to pay over Rs 30-crore tax,
after the historic success of his film 3 Idiots.

According to the company executives familiar with the tax
department’s the I-T department is under pressure to meet
revised collection targets of Rs 400,000 crore by the end of
this fiscal. Though I-T officials are confident of meeting the original
target of Rs 3.70 lakh crore, they apprehend a shortfall in the
revised target, following the recessionary conditions that affected companies.

Now, the finance ministry has admitted a probable shortfall of Rs 26,000 crore
in indirect tax collections (customs and excise) pressure is mounting on
I-T officials for maximising collection of direct taxes, comprising mostly
of corporate and individual taxes.