NEW DELHI: The Central Board of Direct Taxes (CBDT) has announced a crackdown on sectors prone to high cash transactions that often go unreported or under-reported, including IVF clinics, luxury retailers, hotels, and medical colleges. The CBDT's Central Action Plan (CAP) for 2024-25 highlights these sectors as significant sources of circumvention of reporting requirements for cash transactions exceeding Rs 2 lakh.
Despite the requirement for PAN in specific transactions, the current system lacks an effective mechanism to ensure compliance. The action plan proposes a verification process to examine high-value consumption expenditures and ensure accurate reporting. Cash transactions over Rs 2 lakh must be reported via SFT-013, but evasion of these rules is common, the plan notes.
To address this, the CBDT has directed the Directorate of System and the Directorate of Intelligence & Criminal Investigation to identify authorities failing to validate PANs during transactions by September 30, 2024. These authorities are expected to achieve 100% PAN validation by March 31, 2025.
In addition to tackling non-reporting, the tax department has set a target to increase new taxpayers by 10% for the current financial year, slightly lower than the 11.9% increase achieved in FY 2023-24 but higher than previous years. The Central Action Plan emphasizes expanding the tax base through data mining and analytics, which helps identify non-filers and discrepancies in income tax returns (ITRs) through e-Verification. Local intelligence, market association inputs, and outreach programs will also support this effort.
Moreover, the tax department plans a targeted approach for managing tax demands on the top 5,000 arrear cases, which make up about 60% of the total demand exceeding Rs 43 lakh crore. The CAP for 2024-25 recommends quick and thorough analysis of these high-priority cases to improve demand collection and management. Each Principal Chief Commissioner of Income Tax (Pr.CCIT) will form a special team, including the Principal Commissioner of Income Tax (Pr.CIT) and supporting officers, to address these cases effectively.