To better track generation of black money in the system, the finance ministry is planning to streamline third-party information provided on high-value transactions.
For this purpose, the ministry is considering integration of the existing two sources to get all the information under one rule.
Currently, most high-value transactions are reported to the Income-Tax department through two channels - Annual Information Return (AIR) and Central Information Branch (CIB).
The integration is being proposed to make processing of information on high-value transactions faster and take it to a logical end to detect tax evasion in the system.
"We are planning to merge the two so there is a single rule instead of two separate channels. This means third party sources will have to give information only at one place. It will also make it easier for the government to collect information," said a finance ministry official, who did not wish to be identified.
The proposal forms a part of the recommendations of an internal committee of the Central Board of Direct Taxes, which recently submitted its report.
The committee had suggested that there should be one uniform mechanism for reporting third party information.
CIB collects information relating to specified transactions for which Permanent Account Number (PAN) is mandatory, such as bank deposits above Rs 50,000, property deals above Rs 5 lakh, sale or purchase of a vehicle, opening a bank account, and payment of Rs 50,000 or more in securities transactions.
All PAN data is uploaded on the tax department's system and can be accessed by it while scrutinising a case.
AIR, on the other hand, is furnished by banks, financial institutions, trustees of mutual funds, companies issuing bonds or debentures, companies issuing shares through a public or rights issue, registrars or sub-registrars of land or property and the Reserve Bank of India to Income Tax Department.
It is furnished through National Securities Depository Ltd for transactions involving cash deposits of at least Rs 10 lakh in a year in a savings account, credit card payments of Rs 2 lakh or more a year, purchase of mutual fund units of at least Rs 2 lakh, payment of a minimum of Rs 5 lakh to buy bonds or debentures, share purchases of Rs 1 lakh or more, purchase or sale of immovable property valued at Rs 30 lakh and above, and payment of Rs 5 lakh or more to buy bonds issued by RBI.
Another finance ministry official said, "When AIR was not there, all the information was going to CIB. Few years ago, AIR was introduced as it was considered a more efficient way to capture information.
Now, lot of discussion has been taking place on why there is this duplication. Banks often complain when they have to provide information to two different authorities. Everyone wants to deal with one agency."
CIB was brought under Director General (Intelligence) a year ago. Earlier it was under chief commissioner before it was brought under DG (Investigation). AIR is under DG (Systems).
