Mumbai, June 27:
In a major development, the Central Board of Direct Taxes (CBDT) has directed zonal heads of the income tax department (ITD) to share information related to assets and liabilities of defaulters with banks on their request.
This new directive is expected to give impetus to banks’ efforts to recover loans from defaulting parties.
In a directive issued to principal chief commissioners of the IT department, the CBDT said an official of the commissioner rank and above can share such information with the applicant if the former is satisfied that it is in the public interest. I-T returns filed by individuals and Hindu Undivided Families (HUF) with total income in excess of Rs 50 lakh furnish particulars of assets and corresponding liabilities held at the end of the year.
Amit Maheshwari, partner at Ashok Maheshwary & Associates, said: “This directive will only aid the public sector banks in their recovery efforts and not the private sector like Yes Bank, etc. Also, several defaulters may have already shifted their assets and may not hold significant assets in their name.”
“Besides statement of assets, if requested, information such as details of bank account, sundry debtors of the loan defaulter which may aid recovery of loan by the PSB from the loan defaulter, can also be provided,” the CBDT said. It added that such information should be provided only to the borrower, mortgager or guarantor of the loan.
To protect the confidentiality of the information, the department would be required to insert a clause specifying that such information be used only for the purpose of recovery of loan, and will not be shared with any other person or agency. “An undertaking to this effect shall be obtained from the bank (to be signed by an officer not below the rank of manager of the branch concerned) before furnishing the information,” the letter said.