Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

New Delhi, 18th March, 2021

PRESS RELEASE

Income Tax Department conducts searches in Haryana

The Income Tax Department carried out search on 17.03.2021 on a group engaged in the business of real estate, housing, hospitality and retail liquor trade. The search operation was carried out at 12 different premises located in Samalkha, Gurugram, Rohtak and Panchkula.

The search action emanated due to non-compliance to faceless scrutiny assessment notices selected and issued through a computerised system.Notices under the Faceless Assessment Scheme sent to certain assessees were consistently not complied with even though received by them. Data analytics revealed that the recipients were persons of no/low means. Subsequent internal and discreet enquiries revealed that the said persons were the front for the above said group and were also the benamidars of some of the group members.

Further enquiries revealed that the persons to whom the notices were issued were engaged in the liquor business run by the group. It was found that such persons to whom liquor licences were issued were the benamidars of the main group members. They were persons of no means and they have stated on oath that they have no knowledge of the business being run in their names. It seems that their names have been misused to avail the quota reserved for SC/ST section. Further investigation is on to establish the money trail and real ownership. Suitable action under Benami Prohibition Act will be taken in all such cases.

During the search, evidence has been found proving bogus booking of flats in the name of employees/relatives and unidentifiable persons, in the affordable housing scheme project of the group. The company has allotted houses to the employees of the group members, whose un-encashedcheques have been found at the premises. However, flats have been further sold to the actual buyer at a premium of Rs. 6 lakh to 10 lakh each. The premiums have been received in cash and not accounted for in the books.Premium in cash has been charged from the other buyers as well, in this affordable housing scheme. Thus, there is not only misuse of the scheme but also tax evasionwhich is estimated to be not less than Rs. 36 crore.

During the search, evidence was found that the group has claimed bogus expenses on account of building material like cement, raiti, iron bar etc. of around Rs. 100 crore, in previous years, leading to huge evasion of taxes. Further, it was seen that the group is also regularly claiming huge bogus business promotion expenses, in the previous years, and laundering the cash siphoned off as unaccounted investment in immovable properties.

Substantial evidence hasalso been found that the group has routed their unaccounted income of Rs. 70 crore in the form of bogus share capital and unsecured loan, through a shell company which has been invested in the buy-out of a real estate project from a popular builder in the area of Gurugram. Evidence in the form of property documents and title deeds have been found regarding investment in benami properties in India as well as out of the country. The matter is being examined further.

The group has incurred unaccounted expenditure for personal and office purposes in cash running into crores of rupees. This also includes expenditure for taking various approvals for projects and lavish marriage expenses.

During the search, unexplained investment in jewellery of approximate Rs. 3 crore has been found. 4 bank lockers of the group have also been found and put under restraint.

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

New Delhi, 17th March, 2021

PRESS RELEASE

Clarification on continuation of concessional rate of tax on certain interest income of the FPIs

Section 115AD of the Income-tax Act, 1961 (the ‘Act’) inter alia contains provisions for taxation of income of FPIs. Proviso to section 115AD(1)(i) provides that the tax shall be chargeable at the concessional rate of 5% on interest income referred to in section 194LD.

There are reports in certain section of media that the said concessional tax rate of 5% has been withdrawn. It is hereby clarified that there is no change in the said proviso even after amendment of section 115AD vide Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and the concessional rate of tax of 5% shall continue to be applicable for interest income referred to in section 194LD of the Act.  

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

New Delhi, 17th March, 2021

PRESS RELEASE

Income Tax Department conducts searches in Tamil Nadu

The Income Tax Department carried out searches on 11.03.2021 in the case of a group of individuals who are involved in handling huge amount of cash and routing unaccounted money through foreign entities and bank accounts of their related concerns. The search operation was carried out at 20 premises located in Chennai, Coimbatore, Salem, Virudhunagar and Theni.

The evidences found in the searched premises revealed that cash deposits of more than Rs. 100 crore were made through various entities in the guise of sale and purchase of agricultural commodities whereas no such activity exists and no stock was found.  The sale and purchase invoices were found to be fabricated by their employees. Further, sales and stock were circulated among group entities to manipulate the turnover to obtain bank loans. Many of these entities had not filed any tax return so far.

While Rs. 150 crore was received by a group entity through a debenture issue from a foreign entity, the evidences found during the search revealed that this was a sham transaction and all the money went to the personal accounts of these individuals.

Further, the group entities imported spices wherein they over-invoiced the import cost to about Rs. 25 crore. To this extent, money was siphoned-off from India and diverted to their personal accounts in other countries. 

During the search, evidence was also found which showed that numerous immovable properties have been purchased in the last 3-4 years in the prime locations of Chennai and other towns of Tamil Nadu at a value even lesser than circle rates. Many of these properties were also not disclosed in the IT returns.

More than 25 luxury cars were found during the search, and many were unaccounted. Evidence has also been found of the existence of undisclosed foreign bank accounts, foreign credit cards and investments in foreign entities.

Unaccounted cash of Rs. 50 lakh, jewellery worth Rs. 3 crore and 9 luxury vehicles worthRs. 12.5 crore have been seized so far.

The searches, so far, have resulted in the detection of undisclosed income of around Rs. 400 crore. Relevant investigations under the Black Money Act will also be carried out.

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

Ministry of Finance

Tax relief for industries affected by Coronavirus

Dated: 15 MAR 2021

In view of the challenges faced by taxpayers due to the outbreak of Novel Corona Virus (COVID-19), the Government of India has taken several taxation measures to extend tax exemptions received by the industries.

This was stated by Shri Anurag Singh Thakur, Union Minister of State for Finance & Corporate Affairs, in a written reply to a question in Lok Sabha today.

 The Minister stated that the measures, inter-alia, include:-

1) extension of various time limits for compliances and statutory actions under the taxation laws, vide the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020;

2) reduction of the TDS rates for specified non-salaries payments to residents and specified TCS rates by 25 per cent of the specified rates from 14.05.2020 to 31.03.2021;

3) interest for delay in payment of income-tax (e.g. advance tax, TDS, TCS), Equalization Levy, Securities Transaction Tax (STT), Commodities Transaction Tax (CTT) due for payment from 20.03.2020 to 29.06.2020 to be charged at reduced rate of 9% per annum (0.75% per month), if the payment is paid by 30.06.2020;

4) issuance of corporate tax refunds of Rs. 1,27,534 crore in 2,19,050 cases between 1 April 2020 to 28 February 2021;

5) extension of Period of Vivad se Vishwas Scheme for making payment without additional amount to 30.04.2021;

6) extension of date of commencement of operation for the SEZ units for claiming deduction under section 10AA of the Act to 30th September 2020 for the units which have received necessary approval by 31st March, 2020;

7) The date for making investment/construction /purchase/deduction for F.Y. 2019-20 in respect of capital gains under sections 54 to 54GB of the Act was extended to 30th September, 2020.

8) The date for making various investment/payment for claiming deduction under Chapter VIA-B of the Act was extended to 31st July, 2020

Giving more details, the Minister further said that vide the Finance Bill 2021, it has been proposed to introduce inter-alia the following measures such as:-

9) to boost demand in the real-estate sector, the safe harbour limit has been proposed to be increased from 10% to 20% under section 43CA of the Act for the period from 12th November, 2020 to 30th June, 2021 in respect of only primary sale of residential units of value up to Rs. 2 crore. Consequentially, to provide relief to home buyers, the safe harbour limit under the provisions of Section 56 has been proposed to be increased from 10 to 20%;

10) the benefit of deduction under section 80-IBA for the business of developing and building affordable housing project, has been extended for the affordable housing project approved upto 31st March 2022. Also, the benefit of deduction under this section have also been proposed to be extended to rental housing project approved upto 31st March 2022 subject to notified conditions;

11) to provide for extension of the date of incorporation of eligible start up for claiming deduction under the provisions of section 80-IAC of the Act and for claiming deduction under the provisions of section 54GB of the Act on making investment in eligible start-up to 31st March 2022;

12) to reduce compliance burden on small and medium enterprises and carrying 95% or more transactions in digital mode the threshold limit for a person carrying on business is required to get his accounts audited under the provisions of section 44AB has been proposed to be increased to ten crores.

Replying in the context of COVID-19 situation, the Minister stated that considering the immediate requirement of ventilators and other items, the Central Government vide notification No. 20/2020-Custom dated 9th April, 2020 had granted exemption from Basic Customs Duty and Health cess, on the import of the following goods, with immediate effect and up to 30th September, 2020, namely – Ventilators, Face masks, Surgical Masks, Personal Protection Equipment (PPE), COVID-19 test kits and inputs for manufacture of the above items.

Giving more details, the Minister said that the Government of India has taken several measures inter-alia pertaining to direct taxes to support industries which includes the following:-

13) Corporate Tax: It has been the stated policy of the Government to simplify the Income-tax Act, 1961 by removing exemptions and incentives while at the same time reducing the rates of taxes. Starting from the Finance Act, 2016, the corporate tax rates have been gradually reduced while phasing out the exemptions and incentives available to the corporates. In furtherance of this policy, through Taxation Laws (Amendment) Act, 2019, an option has been provided to the corporates to pay tax at concessional rate of 22% (plus applicable surcharge and cess) if they do not avail any exemption or incentive. Further, new domestic manufacturing companies (set up after 1st October, 2019 and starting manufacture on or before 31st March, 2023) has been provided an option for paying tax at 15% (plus applicable surcharge and cess) without claiming specified exemption and incentive. Further, such companies are not required to pay MAT as well.

14) Personal Income Tax: In order to reform personal income tax, Finance Act, 2020 has provided an option to individual taxpayers for paying income-tax at lower slab rates if they do not avail specified exemption and incentive. Apart from the above, Finance Act, 2020 has also provided an option to the co-operatives to pay taxes at concessional rates without claiming any specified deduction or incentive.

15) Abolition of Dividend Distribution Tax (DDT): 

16) In order to increase the attractiveness of the Indian Equity Market and to provide relief to a large class of investors in whose case dividend income is taxable at the rate lower than the rate of DDT, the Finance Act, 2020 removed the Dividend Distribution Tax under which the companies shall not be required to pay DDT with effect from 01.04.2020. The dividend income shall be taxed only in the hands of the recipients at their applicable rate.”

17) The tax exemption vide notification No. 20/2020-Custom dated 9th April, 2020 as mentioned in reply at (a) was granted in view of Coronavirus pandemic and not in view of any recession in the industries. This exemption has expired on 30th September, 2020.

The Ministry of Labour and Employment set up 20 region-wise Control Rooms under the Supervision of the Chief Labour Commissioner (Central) to address the grievances of workers employed in Central Sphere regarding less/non-payment of wages/retrenchment/lay off/termination of employment, the Minister stated.

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RM/KMN
(Release ID: 1704880) 

 

Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

New Delhi, 10th March, 2021

PRESS RELEASE

Income Tax Department conducts searches in Kolkata

The Income Tax Department carried out search and seizure operationon 09.03.2021on various persons based in Kolkata, engaged in the business of Electrical equipment and trading of decorative lighting. The cases were developed through market intelligence and field enquiries. Search and seizure action was carried out at more than 3 premises in Kolkata in the evening of 09.03.2021.

The search action has resulted in unearthing of incriminating evidences (both physical and electronic) where prima facie it has been observed that various bank accounts are being used by these persons for squaring off trade account with Chinese exporters. These products were allegedly not imported at arm’s length price so as to have less impact of customs duty on imported products, thereby reducing the purchase price. Several unaccounted transactions have also been found pertaining to sale of electrical equipment in the domestic market. 

Preliminary enquiry has also indicated that the persons on whom search and seizure operations have been conducted are engaged in clandestine operation, wherein they receive cash, convert them into foreign exchange through individuals engaged in such conversion work (also covered) and through some bank accounts, the amount is transferred to foreign accounts of Chinese exporters who export different kinds of goods to Indian importers.  Hence, part of the purchase cost is transferred to the accounts of Chinese exporters through this mode. Various mobile and electronic devices having such communication/evidences have been seized.

Unaccounted cash in excess of Rs. 3 crore has been found, which has been seized. In one more separate action conducted by the Department, Rs. 76 lakh has been seized.

Further investigations are in progress.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT