By DN Verma

For a long time people have been wondering how politicians amass wealth and that in some ways, their full-time occupation is money-making and not serving the people that they profess and contest elections on that promise.

Then there are pack of lies when they file their income tax returns and also when they file affidavits as they contest elections. They have to file a statement of their wealth along with their nomination papers to the Returning Officers.

Nobody goes through the two sets of papers, one with the Income Tax office and the second with the Returning Officer that goes to the Election Commission.

From one election to the other, usually in a five-year period, the wealth of these politicians normally goes up manifold. Again, nobody tallies the two sets of forms, or the forms filed five years back and find out how wealth has the tendency of doubling, tripling and going over and over.

It seems, finally, the Union government had given some thought to it and an action plan has been introduced. The government was contemplating about it for quite some time but this being a sensitive matter the progress on it was slow. The need was to match the IT returns with what the affidavits for the EC said while filing papers for election. The two sets of statements must tally to prove the candidates/politicians are telling the truth and that their statements match. This may get more taxes for the IT Department.

The Finance Ministry, it's learnt has introduced a plan to achieve some kind of transparency. How far it will go is anybody's guess as the elected lawmakers and other politicians have all the time fought against proper, timely and exact disclosure of their wealth. Even the judiciary was reluctant to disclose their assets.

There are all kinds of ways to conceal and illegally transfer wealth to hide the truth but the tallying of the statements and IT returns is a sure step in the right direction to tackle the problem. This would be done for all Members of Parliament, even who have since become Ministers.

The scrutiny will also cover all the losers who had filed their statements. irrespective of party affiliation. The first step to find out if, according to their statements filed with the election authorities and their income tax returns, they owe any taxes.

There have been numerous cases where income tax papers say something else (generally less income) and the statement with the Returning Officer shows something different. This can also happen because the tax year and election year are not the same. But that is no problem as it can be reconciled according to the dates of declaration of wealth and additional acquisition.

According to Mahendra Kumar Singh writing in the Times of India, the Finance Ministry found that many candidates had made astounding declarations in their affidavits to the election authorities. A preliminary scrutiny revealed that some of them had paid very little or no taxes on the huge amount of wealth declared.

The Income Tax Department hopes to get more taxes from those  candidates whose wealth has grown astronomically in the past few years. Not having a Permanent Account Number (PAN) or not disclosing it for the purpose of evading tax could invite both scrutiny as well as penalty and prosecution in cases where evasion is proved. Although the penalty for not having PAN is just Rs 10,000, for tax evasion it could be as stiff as between 100% to 300% of the tax evaded.

The Department will scrutinize the IT returns of all Lok Sabha candidates, winners and also losers. A letter from the Central Board of Direct Taxes (CBDT) has been sent to all the MPs whose records are not available with the IT department or whose PAN has not matched with the department's records.

It's learnt that the Department has asked the candidates to submit their own income tax returns for the last two years and also of their dependents whose names were mentioned in the affidavits they filed with the EC.

Dozens of candidates have mentioned their assets as between Rs. One billion to two billion. One candidate stated his assets to be worth Rs. Six billion.

Even those having legitimate wealth may be required to pay wealth tax on the current market value of their property at the rate of 1% of the value of the assets, barring those in the exempted category under the Wealth Tax Act.

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