I-T Dept. asked to share wealth details of defaulters with Banks
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In a step to help public sector banks to recover bad loans, the Finance Ministry has asked the Income Tax Department to share details of defaulters’ wealth tax returns with public sector banks (PSBs) if they ask for such information.
The Ministry, in a communication to Commissioners of Income Tax, said, “The CBDT ... clarifies that information on assets of loan defaulters to enable recovery of loans by PSBs from such defaulters is in public interest.’’
The top 30 non-performing assets (NPAs) of state-owned banks account for 40.2 per cent of their gross bad loans.
According to available data, NPAs of state-owned banks rose by 28.5 per cent to Rs.2.36 lakh crore in September last from Rs.1.83 lakh crore in March, 2013. It is expected to have grown further.
Reserve Bank of India Governor Raghuram Rajan had recently expressed concerns over the bad loans in banks.
The directions were issued in view of reluctance of the Income Tax Department, which comes under the Central Board of Direct Taxes (CBDT), to share information provided in wealth tax returns with banks despite repeated requests. However, the Finance Ministry said banks would be allowed to recover their dues from sale of assets of defaulters only after settlement of the claims of the tax department.
“In order to ensure that tax dues of the department against the defaulter (if any) are safeguarded, an undertaking be obtained from the PSB to obtain an NOC from jurisdictional CIT of the loan defaulter before appropriation of the surplus amount recovered from sale of immovable/movable asset of the defaulter, information in respect of which is shared, after adjustment of its loan dues,” it said.
The Finance Ministry further said the information provided by the Income Tax Department to banks should only be used for recovery of loans and should not be shared with any other agency. (PTI)
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