Tuesday, December 20, 2016

Blackmoney: Govt. listened to us on Tipoff email id

Blackmoney: Govt. listened to us on Tipoff email id

On 15th November in our article titled "Blackmoney: Politics & Way Forward" we had suggested that "The Government can setup toll free numbers, email ids and fax numbers dedicated to unearthing black money where any person can send a mesage about instances of blackmoney generation".

The Government has in fact listened and created an email id blackmoneyinfo@incometax.gov.in where people can send email to tip off the authorities about blackmoney.

It is a good way for the tax authorities to get information on blackmoney. However, given the paucity of staff, whether they can really act on it or not is another question. The Government may try to find out the names from these tip offs and match with their database to see if they need to take action on these guys. If there is concrete information provided in the tip off email, then I think it would be easier for the Government to take action. Generally the informant is paid 20% of the amount recovered. However, whether Government will do so based on the tip off email is not known.

Technically, any undeclared wealth is blackmoney. So whether income tax authorities will be interested in the small blackmoney offenders or not is not known. For example, recently there was a petition by people saying that the landlords should be caught as they insist on house rent payments in cash. In many cities the house rent is completely in cash. In cities like Delhi, the house rent is divided into two parts and two cheques are taken often in the name of landlord and his wife. One is shown as rent and the other as rental for lighting and other fixtures. And a third part is taken in cash in lieu of water bills. Though Delhi Government charges a pittance for water, often the landlord has to run his motor pump to pump water from the municipal pipeline and fill his overhead tank. These charges are often 60,000 and above per year per flat. Will the IT department prosecute a landlord for couple of lakhs of undeclared income per year?

Remember that there are millions of such landlords throughout India. Brining them under the tax net will result in more income tax for the Government and that can help lower the tax net.

However, there is also a negative side to the story. These information on the hands of unscrupulous Income Tax officials will only result in extortion for personal benefits and can create an era of uncertainty due to raids. People can also send false information in the tipoff email to implicate someone. So the Income Tax authorities need to do a thorough job.

The main question before us is the blackmoney generation by various businesses which are outside the tax net. A tea stall owner in bangalore sells tea at 15 rupees per glass and sells about 500 glasses of tea in the evening. There are also other snacks. So this small tea seller earns minimum 20 lakhs per year just from tea. Add the income from snacks like biscuits, samosas etc. These are all sold in cash. Ofcourse they are starting with PayTM as well. A plainclothes taxman standing infront of the stall in an afternoon can give very accurate results for their assessments. Sending information about such businessess should be encouraged in the tip off email id blackmoneyinfo@incometax.gov.in . Unfortunately, people feel that these are small shops and they won't report against them. If such businesses can also be brought under the tax net then it would be good for the economy. So guys and gals keep on sending emails to the Government about blackmoney.

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