Fixed deposits interest over Rs 5 lakh can lead tax officials to knock on your door

 BT Online        Last Updated: August 28, 2017  | 13:16 IST

The government seems to be relentless in its effort to widen the tax net in the country. According to a report on The Times of India, the income tax authorities are set to look into the accounts of those who earn an interest of Rs 5 lakh or more from fixed deposits. The Income Tax Department will specifically probe those who are not paying taxes despite holding huge amounts in fixed deposits.

Accounts of even senior citizens who do not include the income from interest on fixed deposits in their taxable income or do not file tax returns at all will also be looked into, the paper cited senior officers in the Central Board of Direct Taxes (CBDT) as saying.

Fixed deposits have drawn the attention of tax authorities because a lot of professionals deal in huge amounts of cash and maintain a lavish lifestyle but do not always file income tax returns.

The Income Tax Department is dependent on banks to provide them information related to such accounts. It apparently has a substantial amount of data from different agencies to track down those who are deliberately avoiding the tax net or not paying the right amount they should as taxes, according to the report.

The focus, however, will be on big absconders. “Our focus is on the large evaders. There is no point chasing the smaller persons who do not yield much returns,” the paper quoted a top-ranking officer as saying.

Prime Minister Narendra Modi-led government has been particular about the need for the expansion of the tax net. In fact, the income tax authorities are expected to raise as much as  Rs 9.8 lakh crore from direct taxes in the current fiscal year.

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