Author: Mahendra Kumar Singh
Publication: The Times of India
Date: January 4, 2010
URL: http://timesofindia.indiatimes.com/articleshow/msid-5408134,prtpage-1.cms
The finance ministry has quietly initiated
the process of opening up the income tax files of politicians belonging to
all parties and tallying their income statements with the affidavits filed
by them with the Election Commission during the 2009 parliamentary polls.
Verification of the assets declared by the
Lok Sabha candidates, many of whom have now become MPs and even ministers,
will help the department to assess if they had paid appropriate taxes as declared
in their statements with the two different authorities.
The finance ministry initiated the exercise
after it found that many of the candidates had made astounding declarations
in their affidavits to the EC while initial scrutiny revealed that some of
them had paid paltry or no taxes. However, As many as 50% of the candidates
in the 2009 LS polls had not furnished their Permanent Account Number (PAN),
making it difficult for the department to ascertain the actual income of these
people.
Despite this problem, the I-T department hopes
to add revenue from many of these candidates whose wealth has seen astronomical
growth in the past few years. Not having a PAN or not disclosing it for the
purpose of evading tax could invite both scrutiny as well as penalty and prosecution
in cases were evasion is proved. Although the penalty for not having PAN is
just Rs 10,000, for tax evasion it could be as stiff as between 100% to 300%
of the tax evaded.
The department will be scrutinizing of the
I-T returns of all Lok Sabha candidates irrespective of whether they ended
up winning or not. A letter from the Central Board of Direct Taxes (CBDT)
has been circulated to all those MPs whose records are not available with
the I-T department or whose PAN has not matched with the department's records.
Sources said the I-T department has asked
the candidates to submit their last two years' income tax returns as well
as those of their dependents whose names were mentioned in affidavits filed
with the EC.
The details sought pertain to assessment years
2006-07 and 2007-08.
The letter said: ``A verification exercise
is being carried out by the I-T department, ministry of finance, in respect
of affidavits filled by you at the time of filing nomination for the general
elections 2009.''
The department has sought to know with which
ward or circle the candidates have been filing their returns and if their
dependents, as mentioned in their affidavit, have also been filing their income
and wealth tax returns.
For fear of being disqualified if statements
made in the affidavits were to be found untrue when elected, candidates had
made some astounding declarations. One candidate declared assets worth more
than Rs 600 crore, while those having assets between Rs 100 crore and Rs 200
crore were found in dozens during the 2009 polls.
Sources said even those who have shown legitimate
wealth would have to pay wealth tax on the current market value of their property
at the rate of 1% of the value of the assets, barring those which are in the
exempted category under the Wealth Tax Act.
