CBDT Cracks Down on Rampant Cash Transactions in Luxury Sectors

The Central Board of Direct Taxes has urged the Income Tax department to monitor cash transactions in sectors like hotels, luxury brands, and hospitals. An annual action plan aims to reduce tax evasion and arrear demands. Increased data analytics will help identify potential taxpayers and verify high-value expenditures.

The Central Board of Direct Taxes (CBDT) has instructed the Income Tax department to monitor cash transactions in sectors such as hotels, luxury brand sales, and IVF clinics in a 'non-intrusive' manner.

The CBDT emphasized the need for 'concerted efforts' to recover mounting arrear demands, with the 2024-25 central action plan outlining a strategy for doing so. Senior officials revealed non-compliance with existing financial reporting requirements for transactions over Rs 2 lakh.

The Board highlighted several business sectors where large cash transactions are prevalent, directing a verification exercise to identify circumvention and enforce compliance. Data analytics will be leveraged to uncover potential new taxpayers, aiming to increase the taxpayer base by 10% this fiscal year.

(With inputs from agencies.)