Check I-T If You Are On Swip Mode & Pan-Based Ledger To Be Created

The income-tax department is hot on the trail of credit card holders who have gone on a shopping binge. The Central Board of Direct Taxes (CBDT) has now stepped up its efforts to track credit card holders who have run up bills aggregating to over Rs2 lakhs but failed to furnish their permanent account numbers (PAN). It has told banks to provide the PAN numbers of credit card holders.

The decision to seek this data from banks follows an analysis of the data on annual information returns (AIR). It showed that the highest number of cases where PAN was not being quoted related to credit card transactions. Several banks issue a range of credit card besides for overseas travel for instance. This client base is growing as also the card spends and the department now wants to keep track to ascertain whether the high levels of expenditure incurred matches with the income reported by cardholders.

The number of such cardholders is reckoned to be 20 million. ?THE CBDT has told banks to provide PAN numbers of credit card holders as many of the banks are also credit card issuers,? said a top government official. AIRs are being filed by third parties- such as banks, credit card companies and the register of immovable property listing out high value transactions of their clients. Credit card companies provide a list of customers who run up yearly aggregate bills of over Rs2 lakhs. Similarly, banks are furnishing a list of customers who have cash de-posits of over Rs10 lakhs in their savings accounts.

The NSDL which the Tax Information Network(TIN),digities this data. A PAN-based individual ledger account is being created based on the information collected through AIRs.

The investment or expenses are matched with the returns of the individual to see if he has short-changed the exchequer or evaded taxes. The information collated through the AIR is being made a available on-line to the assessing officer. Seven authorities are now filing these re-turns. The first set of AIR was filed last fiscal on high value transactions during 2004-05. There were 18 lakhs pieces of transactions valued at over Rs 13 lakhs crore. However, PAN was not quoted in nearly 60% of the transactions.

The department has already sent notices to those who have not quoted their APN numbers. ?The income tax department has powers under the income-tax legislation to invoke penal provision against individuals who do not respond to these letters?, said Mr. S K Sharma, chief commissioner of income tax. However, several credit card holders, who activated their cards before last fiscal, do not have a PAN because they did not have to quote this number in their credit card applications. However, anyone applying for a credit card now has to give his PAN number.? We intend to populate the data base on PAN by getting information on credit card holders from banks,? said a top CBDT official.


Source: Economic Times 19th July 2006