Lok Sabha Question No. 2144 (UNSTARRED), answered on 2016-05-06
Subject: Evasion of Capital Gains Tax
Ministry: FINANCE
Asked by: RAM TAHAL CHOUDHARY

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA

UNSTARRED QUESTION No.2144

TO BE ANSWERED ON FRIDAY, THE 06 th  May, 2016

VAISAKHA 16, 1938 (SAKA)

## EVASION OF CAPITAL GAINS TAX

## 2144. SHRI RAM TAHAL CHOUDHARY:

## Will the Minister of FINANCE be pleased to state:

- (a) whether  a  demand  has  been  made  to  the  Government  to  take  legal  action  besides imposing follow-up interest and monetary penalty on the companies which have not paid due capital gains tax and if so, the details of the last three financial years;
- (b) whether the Government maintains data regarding imposing interest and penalty on such defaulting companies, if so, the details thereof;
- (c) if not, whether the Government is suffering revenue losses worth crores of rupee as a result thereof, if so, the reaction of the Government in this regard; and
- (d) the corrective steps taken by the Government in this regard?

## ANSWER MINISTER OF STATE FOR FINANCE

(SHRI JAYANT SINHA)

(a), (b) and (c): Appropriate action against tax evasion, including evasion of tax on capital gains, is  an  on-going  process.  Whenever  such  cases  are  noticed  by  the  Income  Tax  Department, appropriate action is taken under direct taxes law. Such action is not dependent upon a demand to be made to the Government. The actions under the Income-tax Act, 1961 include searches, surveys,  enquiries,  assessment  of  income,  levy  of  tax,  interest  &  penalty  and  filing  of prosecution  complaints  before  criminal  courts,  wherever  applicable.  Such  tax,  interest  and penalty form part of the total liability of each assessee and is enforced accordingly. Therefore, separate data for liability on account of tax, interest and penalty attributable to evasion of tax on capital gains is not maintained. Further, disclosure of information regarding specific taxpayers is prohibited except as provided in section 138 of the Income-tax Act, 1961.

(d) Periodic review of the Government's mechanism for taking corrective steps is an on-going process. In recent times, the Government has taken several effective measures, both by way of policy-level initiatives as well as through more effective enforcement action on the ground, to tackle  tax  evasion.  These  steps  include  putting  in  place  robust  legislative  and  administrative frameworks,  systems  and  processes  with  due  focus  on  capacity  building  and  integration  of information and its mining through increasing   use of  information technology.  Major initiatives

taken by the Government in the recent past include - (i) Constitution of the Special Investigation Team (SIT) on Black Money under Chairmanship and Vice-Chairmanship of two former Judges of Hon'ble Supreme  Court, (ii) Introduction of the Benami  Transactions (Prohibition) Amendment Bill, 2015 to amend the Benami Transactions (Prohibition) Act, 1988 with a view to,  inter  alia,  enable  confiscation  of  Benami  property  and  provide  for  prosecution,  (iii)  While focusing upon non-intrusive measures, due emphasis on enforcement measures in high impact cases  with  a  view  to  prosecute  the  offenders  at  the  earliest  possible  for  credible  deterrence against tax evasion, (iv) Initiation of the information technology based 'Project Insight' by the Income  Tax  Department  for  strengthening  the  non-intrusive  information  driven  approach  for improving  tax  compliance  and  effective  utilization  of  available  information,  (v)  Legislative measures including amendments in the Income-tax Act, 1961.

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