With stock market indices continuing to scale dizzy heights this
fiscal, the Finance Ministry is now swamped with stock market related
pre-Budget suggestions to help check tax avoidance.
The accountancy profession regulator, the Institute of Chartered
Accountants of India (ICAI) has suggested that listed and unlisted
companies receiving share application monies beyond a particular
threshold should be covered under the ambit of annual information
returns (AIR). The CBDT has been relying on AIR to enlarge its
information base on high-value transactions. Such returns help the Tax
Department to detect tax evasion in a non-intrusive manner.
These returns are being filed with the Tax Department by third
parties for transactions beyond a threshold limit. Currently, seven
categories of entities/ person and transactions above certain specified
value are coming under the scope of AIR.
“For listed companies, we have suggested that companies receiving
share application monies exceeding Rs 1 lakh should come under AIR.
Also, unlisted companies receiving share application monies exceeding
Rs 50,000 should furnish information under AIR,” Mr G. Ramaswamy,
Chairman of ICAI’s fiscal laws committee, told Business Line. ICAI has recently submitted its pre-budget memorandum to the senior officials of the Central Board of Direct Taxes (CBDT).
In respect of day traders, ICAI has said that sales and purchase of
shares exceeding Rs 5 crore should be brought within ambit of AIR. It
has been suggested that the information could be filed by the brokers
concerned who are dealing with the day traders.
Moreover, ICAI has also suggested that information on Government
tenders where the value exceeds Rs 10 lakh should also be provided by
the government department concerned. Also, educational fees paid in
excess of Rs 1 lakh per annum should come under the AIR ambit, ICAI has
submitted to the Finance Ministry.
CAclubindia
