Widespread cash transactions in industries such as luxury brand sales, hotels, IVF clinics, and hospitals require “non-intrusive” investigation, the CBDT has requested of the I-T department.
The Central Board of Direct Taxes, the nation’s highest authority on direct tax administration, has also requested that the tax department make “concerted efforts” to collect arrears, which have been rising at a “steep rate” since the previous fiscal year.
Examining these reports, it is observed that there is widespread circumvention of these provisions,” the Board informed the IT department.
Further, although section 139A requires PAN (permanent account number) to be provided or obtained in specified transactions, there is no reporting/verification mechanism for determining the compliance with this obligation,” it continued.
The department identified several businesses, including hotels, banquet halls, luxury brand retailers, IVF clinics, hospitals, designer clothing stores, and NRI quota medical college seats, that detected large cash transactions and non-compliance with regulations.
According to a senior officer, the amount of cash in the economy can be estimated from the fact that the tax department conducted 1,100 searches or raids nationwide in the 2023–24 fiscal year to combat tax evasion. These operations resulted in the seizure of assets totalling approximately Rs 2,500 crore, of which Rs 1,700 crore was cash.
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