Tax avoidance frauds: Income Tax Department dishing out rewards of up to Rs 5 crore to informants

To back PM’s step against black money and tax elusion, the central government replaced the 2007 version of the Income Tax Informants Reward Scheme with a newer 2018 version of the scheme, to be brought into effect on June 1. According to this new scheme, information on income tax theft and evasion of tax on assets in the country can be rewarded up to an amount of Rs 50 lakh, provided that the data is ample. In addition to that, reports regarding undisclosed black money in the foreign countries and information about properties purchased via fake names (Benami properties) can earn one reward of up to 5 crore and 1 crore respectively. 

Proper procedure must be followed while reporting the aforementioned to the relevant authorities in the IT department in order to be regarded as an informant. Information reported via any mode other than in written form as guided (Annexure-A) shall not be deemed eligible for any reward. Emails, letter posting, etc are all deemed inconsiderable for a reward. Also, the info reported must fall under the Income Tax Act, 1961 in order to be considered for action. 

To safeguard the interests of the informants who had reported fraudulent practices before the revised scheme was issued, the government announced for the rewarding procedures to be unchanged in such cases.

In a bid to scrutinise and levy a tax on the hidden and undisclosed assets of Indian citizens in foreign countries and to penalise the guilty, the government had presented the Black Money and Imposition of Taxes Act, 2015. To achieve the same, and appealing reward of up to Rs 5 Crore was put out with an aim to lay an appeal to the relevant parties abroad. 

For the reward to be claimed, the info provided must be actionable under the Black Money and Tax Imposition Act, 2015. Also, with the total amount of the reward announced being up to Rs5 crore, the amount paid is less than 10% of the recovered taxes.

The Director-General of the IT investigation cell is the only authority which can receive or appoint to receive the relevant info.

Benami possessions;  pinning down the frauds.

Under the Investigations directorates of the IT department, BPU`s have been established, whose joint/ additional Commissioners receive info regarding Benami properties and also announce the one`s eligible for the declared reward of up to Rs 1 crore (not more than 5% of the property reported and recovered.)

Until the reported property isn’t wholly seized; the informant is only eligible to receive a temporary reward (equal to or less than 1% of the related asset with the ceiling amount being Rs 10 Lakh.), which loses interim status two years post the date of seizure.

 Report Tax Evasion and Theft

Stand against Tax theft and elusion, contact 01126174191. Contact via mail at add-dgcei(at)nic(dot)inBB.

Secrecy of personal details is guaranteed. form can be filled to report.