Political donations: Not only the bogus donators but also intermediaries are in trouble. India’s income tax department has sent notices to about 8,000 taxpayers who have made large donations to charitable trusts, suspecting them to be attempts at tax evasion. Data analytics suggested these taxpayers were making donations disproportionate to their income and expenditure, officials told.
Those served notices include salaried and self-employed individuals, apart from companies. The IT department is also looking into independent tax professionals who facilitated these transactions.
“In all 8,000 odd cases, the donation was exactly the amount required to lower the tax slab or get a full exemption and was paid by cash,” a tax official said.
“Also, an exceptionally high amount was paid to tax professionals, even by a straight salaried person.” The notices were sent over three weeks from mid-March to early April and were for the assessment years 2017-18 to 2020-21.
More notices are likely in the coming weeks. In the case of businesses, mostly small ones, the amount paid to charitable trusts was out of sync with income, the officials said. In these transactions, cash contributions are returned to the taxpayer along with a donation receipt after deducting a commission, helping the assessee evade tax, they said.
The department is also tracking charitable trusts that are offering fake bills to taxpayers. While no action has been initiated against them so far, they may lose their tax exemption status if there is wrongdoing.
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