Earning Income From Property And Not Filing ITR? You Could Be In For Trouble

By mid-August 2017, benami property worth Rs 800 crore has been seized by the government. Lately, the Income Tax (I-T) Department has planned to scrutiny those holding property and deriving money from it but not filing their taxes. Prior to the Budget 2017, reports claimed that only 24 lakh tax payers had declared incomes above Rs 10 lakh per annum although the population of India stands at 125 crore.

Here's a look at the developments in this regard:

This year certain changes were introduced in the Income Tax Return (ITR) forms. A simplified, one-page ITR-1 form called Sahaj was introduced this year for those earning from salary or pension, income from other sources and a single house.

The ITR-2 is for those having income from salary, more than one property and capital gains.

Some states such as Telangana and Andhra Pradesh are resorting to the digital way of keeping a tab on property records, courtesy, blockchain technology. Money and transaction trails, therefore, could be permanently recorded.

Media reports say the I-T Department questioned some of those who had not paid tax on their rental income which was bought under the RBI's Liberalised Remittance Scheme (LRS) which lets them invest $2,50,000 abroad.

After making Aadhaar card linking mandatory for filing income tax returns, the government may soon be making the UIDAI-based authenticationcompulsory for real estate deals. Note that about 81 lakh Aadhar cards were deactivated owing to various reasons such as duplicity, discrepancies in supporting data, etc.

The Lucknow Municipal Commissioner has said that all property within its jurisdiction would be linked to Aadhaar cards and the database would be integrated with other departments as well. This would later be extended to the entire state if it works well.

Heard about the Operation Clean Money? The I-T Department had initiated this in the beginning of 2017 to e-verify large cash deposits made during November 9 to December 30, 2016. Data analytics has been used for comparing the demonetisation data with information in ITD databases. In the first batch, around 18 lakh persons have been identified in whose case, cash transactions do not appear to be in line with the tax payer's profile. As a result, there were 25 per cent more ITR filings this year. The verification would be closed if the cash deposit is declared under the Pradhan Mantri Garib Kalyan Yojna (PMGKY) or if the person is able to declare the right source of income.

In the second phase of the Operation Clean Money, over 5,50,000 people have been identified to be questioned and tracked.  

Also read: #Budget2017: Was This A Good Budget For Salaried, Genuine Home Buyers?