IVF Centers came on radar of Income Tax Department; Designer, Fashion Stores and NRI quota Medical Seats are also being monitored

In vitro fertilization (IVF) clinics, designer clothing outlets, and NRI quota medical seats are all on the Income Tax Department’s radar for tax fraud.

According to authorities, this is part of a drive to ‘widen and deepen’ the tax base under the Central Action Plan for the current financial year, 2023-24 (FY24).

In fact, there was a possibility of disturbances in the reporting of large-scale cash transactions and transactions worth more than two lakh rupees. Compliance with the obligation to give PAN for these transactions is also low. The Income Tax Department has directed Income Tax authorities to investigate income and ITR mismatches.

For several years, India’s tax officials have been keeping track on high-value transactions, but there is little evidence on the effectiveness of their procedures.

The IVF business is quickly expanding, and treatment fees range from 70,000 to Rs.4 lakh, with some branded clinics charging more than Rs.4 lakh.

Similarly, the fee for NRI quota seats varies per institution and location. The minimal charge, however, is in the range of Rs.1822 lakh per annum.

The price tag of designer clothes is difficult to estimate.

Pursuant to the Income Tax Act, every cash sale or purchase of goods or services above Rs. 2 lakh must be declared using Form SFT013. It has been observed that these provisions are commonly circumvented.

Furthermore, while Section 139A of the IT Act requires PAN to be submitted or obtained in some transactions, there is no reporting or verification system in place to ensure compliance.

In any case, high-value consumption expenditures must be validated using tax payer information available from the department. As a result, it is critical to identify potential sources of circumvention, such as hotels, banquets, luxury brand retailers, IVF clinics, hospitals, designer apparel stores, and NRI quota medical college seats.

Furthermore, officials have been encouraged to identify such sources and conduct a non-intrusive verification exercise.

Nearly 7.8 crore returns were filed in the previous financial year, a 6.8% increase over the 7.3 crore returns filed in FY2021-22.

During this financial year, the department has also directed its field officers to increase the number of new filers and those who did not submit returns at the beginning of the year.

The objective has been set at 10%, which is somewhat lower than the 10.6% increase achieved last year when the base effect and other characteristics such as buoyancy, filer base at the start of the year, and non-filers found through the monitoring system are taken into account.