Lok Sabha Question No. 119 (UNSTARRED), answered on 2021-11-29
Subject: Tax Evasion
Ministry: FINANCE
Asked by: Ranjanben Dhananjay Bhatt

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA UNSTARRED QUESTION NO. 119

TO BE ANSWERED ON MONDAY, NOVEMBER 29, 2021 AGRAHAYANA 8, 1943 (SAKA)

## TAX EVASION

119. SHRIMATI RANJANBEN DHANANJAY BHATT:

Will the Minister of FINANCE be pleased to state:

- (a) whether the incidents of tax evasion are increasing in Delhi and other parts of the Country;
- (b)  if so, whether the Government has taken any step in this regard so far;
- (c) if so, the details thereof; and
- (d) if not, the reasons therefor?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a): There is no evidence to suggest that incidents of Income tax evasion are increasing in Delhi and other parts of the country.

In terms of cases detected under Goods & Service Tax (GST) and Customs, there is no increasing trend in such evasion noticed in Delhi, although, there is overall increase in detection of GST and Customs evasion cases in the country.

- (b) to (d): The Income Tax Department (ITD) takes suitable steps against the persons indulging  in  tax  evasion  such  as    conducting  search  and  seizure  actions,  surveys, summons,  assessment  and  reassessment  of  income,  levy  of  penalties  and  filing  of prosecution complaints before criminal courts, wherever applicable.

In recent times, various measures have been initiated to prevent tax evasion which, inter-alia, includes:

- (i  )    Enactment  of  'The  Black  Money  (Undisclosed  Foreign  Income  and  Assets)  and Imposition of Tax Act, 2015 which has come into force w.e.f. 01.07.2015 to specifically and more effectively deal with the issue of black money stashed away abroad.
- (ii)  Developing a wide range of non -intrusive methods for detecting tax evasion. They include  measures  like  Computer  Assisted  Scrutiny  Selection  (CASS)  of  cases  for Scrutiny; Non-filers Monitoring System (NMS) to prioritize action on non-filers; Income Tax Business Application (ITBA) to help in curbing tax evasion by putting in place end to end processes for all verticals of the Department etc.

(iii)  Collecting  information  on  Specified  Financial  Transactions  (SFT),  above  notified thresholds,  relating  to  cash  deposits,  credit  card  payments,  purchase  and  sale  of properties, purchase of shares and mutual funds etc. Such information is collected, collated  and  analyzed  for  computer  aided  scrutiny  and  risk  profiling  of  taxpayers, identification of non-filers and stop filers etc.

(iv) A large number of legislative provisions have been made in the Income Tax Act, 1961 (the Act) to effectively tackle tax evasion such as mandatory quoting of PAN for various cash transactions, restrictions on cash transaction of Rs. 2 lakh or more, levy of TDS @ 2% to 5% on the amount of cash withdrawal by a person exceeding Rs. 20 lakhs in aggregate  from  one  or  more  accounts  maintained  by  the  recipient  with  a  banking company or a co-operative society engaged in the business of banking or post office during a financial year, prohibiting taxpayers from taking/accepting loans or deposits or a sum of more than Rs.20,000/- in cash or repayment of loans or deposits of a sum of  more  than  Rs.  20,000/-  in  cash.  No  deductions  under  section  80G  of  the  Act  is allowed if cash donations exceed Rs. 2,000/-.

(v)  To  bring  transparency  in  the  source  of  funding  to  political  parties,  suitable amendments have been made with effect from 01.04.2018 to provide that no donations of Rs.2,000/- or more shall be received otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank account or through electoral bonds.

(vi)  Introduction  of  measures  to  incentivize  digital  transactions  by  allowing  for transactions  through  other  prescribed  electronic  modes  (apart  from  account  payee cheque or account payee bank draft) such as payment by credit cards, debit cards, net banking, UPI, RTGS, NEFT, IMPS and BHIM Aadhaar pay.

(vii) Proactively engaging with foreign governments with a view to facilitate and enhance the exchange of information under Double Taxation Avoidance Agreements (DTAAs)/Tax Information Exchange Agreements (TIEAs)/Multilateral Conventions.

(viii) Taking effective and timely enforcement actions including expeditious investigation in foreign assets cases.

(ix)  Mandatory linking of Aadhaar with PAN, to aid in de-duplication of PAN and also prevent potential tax frauds.

Further, several measures have been taken to check tax evasion in GST such as detection of issuance of fake invoices, data analysis based interventions, introduction of  e-way  bills  &  e-invoices,  aadhaar  based  authentication  for  new  applicants. The Directorate General of GST Intelligence and Central GST formations keep constant vigil & take action in accordance with law wherever GST evasion is noticed.

Besides this, several measures have also been taken to check Custom Duty evasion such as risk profiling, targeting, data analytics based intelligence gathering and nonintrusive inspection of cargo. The Directorate of Revenue Intelligence and Customs field formations  keep  constant  vigil  and  take  action  in  accordance  with  law  wherever Customs duty evasion is noticed.

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