To broaden the revenue base, Income Tax Department to concentrate on high spenders

New Delhi: The Central Board of Direct Taxes (CBDT) may tighten the noose by ringing in strict regulations against high-value spenders, such as those who engage in lavish overseas trips, pay excessively high electricity bills, buy designer clothing, use the services of fertility clinics, etc., as part of its aim to extend the tax base.

A comprehensive central action plan for tax-broadening measures is in the works. Some of the measures include tightening the organized collection of data from various agencies and third parties, checking properly the statements of tax deducted at source/tax collected at source by specific entities, and scrutinizing statements on specified financial transactions by reporting entities in the case of high-value purchases.

Post-demonetization, high-value transactions became subject to taxation. The tax department used data analytics to identify potential non-filers who engaged in high-value transactions in 2017–18 (the year following the note ban) but did not submit tax returns.

The draft of the plan will be presented to the CBDT this week for approval and is anticipated to go into force this month, according to officials. As per the information contained in the plan, a verification method was recommended to verify that companies required to disclose specific financial transactions or related items make sure they are in compliance with tax laws.