Tax dept can share info on assets of loan defaulters: CBDT

The Central Board of Direct Taxes (CBDT) has recently given permission to tax officials in order to share information on immovable properties of such defaulters following many requests from banks. “The Board is of the view that sharing of information with PSBs in respect of assets held by defaulters of loans, so as to enable recovery of loans from such defaulters, is in public interest, and hence, can be furnished,” said the CBDT.

It also added that apart from the Statement of Assets, if requested, other information like bank accounts details and sundry debtors of the defaulter can also be provided. The CBDT, meanwhile, also stated that the information may be provided only of the borrower, mortgager and guarantor of the loan. A confidentiality clause must also be included during information delivery and an undertaking signed by the bank that the data will be used only for loan recovery and not for any third party use.

The tax officials have also been directed by the CBDT in order to ensure that any tax due against the defaulter is safeguarded in case of recovery based on the information shared. “An undertaking may be obtained from the PSB to obtain a No Objection Certificate from the jurisdictional Principal Commissioner of Income Tax of the loan defaulter before appropriation of the surplus amount recovered from sale of immovable and movable asset of the defaulter, information in respect of which is shared,” it said.

The CBDT directive is the latest in a series of measures intended at helping banks recover dues from defaulters, many of whom have willfully defaulted on loans.

With a multi-pronged effort in place for recovery of bad loans, gross non-performing loans of PSBs fell by Rs 89,189 crore to Rs 8.06 lakh crore as on March 31, 2019. Amit Maheshwari, Partner, Ashok Maheshwary & Associates, said, “This directive will only aid the public sector banks in their recovery efforts and not the private sector lenders. Also, several defaulters may have already shifted their assets and may not hold significant assets in their name.”