Taxman watching evaders, says Chidambaram

Hinting at action against tax evaders, Finance Minister P Chidambaram today said many high networth individuals, who had stopped filing income tax returns, and those who never disclosed their earnings were under the taxman's scrutiny.

"Paying income tax is a matter of pride. You can hold your head high. It is a badge of respect and honour," Chidambaram told reporters, after filing his IT returns at the income tax office here.

Chidambaram said many top filers of income tax in the past have stopped filing IT returns. "They have been top filers of income tax for a few years," he said, adding that these individuals (mistakenly) think that they can "get away" as they were top filers in the past.

There were also a large number of people, who have not been filing returns at all. "These stop-filers and non-filers are under the scrutiny of the IT department," he added.

Chidambaram also expressed confidence that the direct tax collections as a percentage of GDP would cross five per cent at the end of this financial year, in line with the Budget forecast. "Last year, the direct tax to GDP ratio stood at four per cent," he pointed out.

The finance minister said a combination of factors such as economic growth, better corporate results, higher salaries, more information about the tax assessees, tighter administration and annual information report (AIR) have contributed to this optimism.

Commenting on the high foreign institutional investments (FII) outflows, Chidambaram said, "Inflows and outflows are part of the capital market." He added that a large amount of money from Tokyo, Singapore, Hong Kong and West Asia, were waiting to enter India.

Stating that the country gets a "large dose" of FII investments, Chidambaram said "India's story is well established".

"FIIs and foreign direct investments (FDI) are here to stay," he added.