I-T Dept's new scheme: Inform govt about tax evasion, get rewards up to Rs 5 crore

The centre government has launched Income Tax Informants Reward Scheme, 2018, after superseding the 2007 award scheme, under which a person can get reward up to Rs 50 lakh for giving specific information about substantial evasion of tax on income or assets in India. Also, those informing the government about 'undisclosed black money' stashed abroad can win awards up to Rs 5 crore. Anyone who informs about Benami properties can get awards up to Rs 1 crore. The scheme comes into effect from June 1.

The information should be provided in a prescribed manner to the designated officers of Investigation Directorates in the Income Tax Department and should be actionable under the Income-tax Act, 1961. The scheme has been launched to give further boost to Prime Minister Narendra Modi's drive against black money and tax evasion.

Under the scheme, a person will be considered an informant if he/she furnishes specific information of substantial tax evasion in a written statement in the prescribed form (Annexure - A to this Scheme). Those who would send the details through letter, e-mail, CD, WhatsApp, SMS, phone, posting in social networking site or publishing letter in newspaper or any other media would not be considered for the reward.

The new reward scheme has superseded the earlier reward scheme issued by the government in 2007, though the guidelines for grant of rewards to informants will continue to be applicable in cases where information was received before the date of issue of this scheme.

The centre had earlier introduced Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, in order to investigate and assess income and specific assets kept in foreign countries by people taxable in India, recover tax on it, and take other actions like penalty and prosecution.

Also, with the objective of attracting and encouraging people to give information about such income and assets actionable under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, reward up to Rs 5 crore has been introduced in the new reward scheme.

The amount has been kept high to make it attractive to potential sources in foreign countries. Under this scheme, a person can get reward for giving specific information in prescribed manner about substantial tax evasion on income and assets abroad which are actionable under Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

The maximum amount of reward payable under this Act shall not exceed 10 per cent of the additional taxes levied and realised under the said Act, subject to a ceiling of Rs 5 crore, a government statement said.

Information under this scheme has to be given in prescribed manner to the Director General of Income Tax (Investigation) or an officer whom he may authorise in this behalf. Foreigners will also be eligible for reward under this scheme. Identity of the persons giving information will not be disclosed and strict confidentiality shall be maintained.

Crackdown on Benami properties

Under the Benami Transactions Informants Reward Scheme 2018, a person can be rewarded up to Rs 1 crore for giving specific details to the Joint/Additional Commissioners of Benami Prohibition Units (BPUs) in Investigation Directorates of Income Tax Department.

If the Benami property is provisionally attached, the informant will be eligible for an interim reward. The informer will get final reward only when the Benami property has been fully confiscated. The confiscation shall be deemed to be final if two years have passed from the date of confiscation and there is no litigation pending.

Interim reward will not be more than 1 per cent of the total value of the attached benami asset. The government has set Rs 10 lakh as maximum amount for such rewards. Similarly, the final reward will be up to 5 per cent of the value of such assets. However, maximum amount of total reward (interim and final) in respect of a single benami property shall be limited to Rs 1 crore only.