I-T scanner on FDs earning more than Rs5 lakh interest but paying no tax

The Income Tax Department has now turned focus on high interest incomes that tend to avoid payment of tax. According to the I-T department, there are thousands of fixed deposit accounts drawing huge amounts as interests, but many of these accounts evade TDS on interest.

The department is preparing to track these persons with high-interest incomes from fixed deposits (FDs) but do not include the amount in their taxable income, according to report in The Times of India.

Armed with Big Data obtained from banks in the wake of the demolition drive, the I-T Department will scan deposits of individuals, including senior citizens, having an interest income of Rs5 lakh and above, but do not pay tax on the interest income.

The department will use data collected from various agencies (such as banks) on taxpayers as well as tax deductions on FDs, the reports quoted senior officials of the Central Board of Direct Taxes (CBDT) as saying.

According to tax officials, individuals falling in the 10 per cent bracket pay their taxes, but those in the 30 per cent bracket often cheat on tax payments.

At the same time, there has been a rise in the earnings based on income from interests received on large fixed deposits as it is considered to be a more durable source of income.

The department will also track professionals who receive their payments in cash and do not disclose the actual income amount in their annual statements, according to the report.

This is yet another crack-down on black money after the I-T Department initiated steps to weed out individuals who bought property with suspected benami money.

These moves are expected to clear the way for the government achieving Rs9,80,000 crore in direct taxes in the current fiscal year and an expansion in the tax base.