Income Tax Department's New Campaign to Identify Tax Evasion in JDAs:

Income Tax Department's New Campaign to Identify Tax Evasion in JDAs The Income Tax Department is soon introducing a new campaign to target people who have signed a Joint Development Agreement but did not pay capital gains taxes. The department has identified over 25,000 firms in Kolkata and Bengaluru that have not paid the capital gains taxes.

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The Joint Development Agreement (JDA) is a contract where the person owning the land agrees to allow another person to develop a real estate project. Under this contract, the landowner may get monetary consideration from the developer. The capital gain that the owners make during this transaction is taxable under the Income Tax Act. However, there are many cases where the owners have not reported this capital gain on their income tax returns to avoid paying taxes on it. Therefore, the income tax department's drive will help in identifying such cases where the taxpayers may not have paid capital gain taxes. The campaign is likely to begin in the coming days. The Income Tax Department will send emails to selected taxpayers, asking them to honestly declare any unpaid taxes. Over the past few years, the tax department has used the campaign Nudge, which stands for Non-Intrusive Usage of Data to Guide and Enable Taxpayers. Under this campaign, instead of taking strict action, the income tax department sends SMS or Emails to the taxpayers informing them about any undisclosed foreign assets or virtual digital assets. It encourages them to voluntarily revise their filings and pay any dues without any penalty. A campaign on foreign assets and income for FY 2023-24 saw 12,700 revised returns, with 900 changing their residential status to non-residents. Over 30,000 individuals disclosed foreign assets and income, disclosing Rs 29,000 crore in assets and contributing over Rs 1,000 crore in additional taxes. According to government sources, the department believes that under this drive, many people who may have missed paying their taxes by mistake will come forward and clear those dues. However, if the landowners do not cooperate and voluntarily pay the taxes, the department will take further action.

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Taxpayers can update their latest income tax returns and if they have transactions from the last financial year, they can pay taxes on them. If the transactions are from the previous financial year, you may be required to pay an extra 25% tax, but there will be no penalty.