Taxmen get more teeth to crack down on defaulters

NEW DELHI: To track down tax defaulters who have changed address but not updated the same on their PAN card records or income tax returns, the government has tweaked rules to empower the taxman to access a number of databases that may have their current address. These include banking, insurance, municipal corporations’ database, which would help the tax department to issue notices or summonses to them and extract due taxes. 

Earlier, the I-T department could only issue notice as per the communication address given in PAN, ITR or any tax-related communication. For any further information, the department had to place a request with the authority concerned to access their database. And, in many cases, release of information was subject to the discretion of the latter. “Earlier also, the department used to reach defaulters like that. But it used to be based on requests. Now it has got legal sanction to approach them,” a senior official with the tax department told Express. 

An amendment in I-T rules to this effect was recently notified by the CBDT. According to the notification, “...the address of the assessee as available with a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of the said Act); or the address of the assessee as available with the Post Master General....; or the address of the assessee as available with the insurer...”, would be open to access by the taxman. Also available to the department would be the address of the assessee present in the “records of the government” and that available in the database of the “local authority”. 

Government database means all databases where a taxpayer is registered, like a driving licence or voter ID, and the local authority means the municipal body or a similar department. For the income tax department, the current rules were a bit restrictive because in a number of cases where taxes worth crores of rupees are stuck, the I-T department was either not able to trace the assessee as they have changed their address and not notified tax authorities or had simply gone hiding to evade tax. Now, the taxman would still reach them.