After trying to establish tax-trail on bank cash withdrawals to curb black money, the government now proposes to bring charitable institutions under the scanner through necessary amendments to tax laws in Parliament this week.
Replying to supplementaries during Question Hour in Rajya Sabha on Tuesday, Finance Minister P Chidambaram said there were several bodies which supported charity through education and health and their incomes could be large.
Information on savings account
Under the stipulation, banks with cash deposits of Rs 10 lakh (Rs 1 million) and above in a year in any savings account maintained by a person would have to report under the Annual Information Return.
Similarly, any company or institution issuing credit card should report payments made by a person against credit card aggregating Rs 2 lakh (Rs 200,000) and above in a year.
A trustee of a mutual fund or persons authorised to manage such funds would have to report investments in mutual fund of Rs 2 lakh or more by a person under AIR.
A company or institution issuing bonds or debentures or a company issuing shares through public or rights issue will also have to file AIR if investments are of higher denomination.
Investment in bonds
An officer of the RBI will have to file AIR on an investment by a person for an amount aggregating Rs 5 lakh (Rs 500,000) or more in a year in bonds issued by the Reserve Bank of India.
Chidambaram described the mandatory filing of AIR by registrar/sub-registrar of properties on purchase or sale by any person of immovable property valued at Rs 30 lakh (Rs 3 million) or more as an anti-black money measure.
He said the 'guideline value' fixed for a property would indicate its value.
Chidambaram said the AIRs will be filed from 2005-06 onward and the due date for furnishing the AIR is August 31 of every financial year.
Amendment to laws
The minister said a bill to amend tax laws would be introduced in Lok Sabha by Friday and would be referred to a standing committee after circulation of the draft legislation to members.
"I need support of the House," Chidambaram said, adding that "it is a sensitive subject and I want to approach it with caution and sensitivity."
Chidambaram, however, ruled out bringing marriage expenses under the ambit, saying: "We have to strike a balance."
"If we empower the tax department more and more it could become intrusive and you will protest," he told RSP member Manoj Bhattarcharya.
Chidambaram said the government had taken some steps against rich transactions and had re-imposed service tax on pandals, removed by the previous government. He said it would be possible to assess transactions of outdoor caterers.
In reply to another query, Chidambaram said the government has made it mandatory for registrars of property, RBI and banks to report seven categories of high-value transactions.
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