100 leading share investors under NBR scrutiny

More than 100 leading share investors who invested in the capital market availing the opportunity that was offered in 2009 with a condition to hold the investment for two consecutive years, are now under scrutiny of the revenue intelligence cell. Central Intelligence Cell (CIC) of the National Board of Revenue (NBR) board has identified those leading players who invested in the share market, availing an opportunity under which the NBR would treat their investment as capital gains. "There was a rule of NBR under which investors in the share market were under obligation to hold their investment for two years to get the facilities of investment without any question," said a senior tax official. A good many investors have not complied with the rules on holding the investment for two years for making their investment in stock market "without being asked any question" about the sources of their funds, he said. "A number of investors sold their shares during the upward trend of market in the late 2010," the official added. Intelligence team of the NBR has found 100 such players of the market who enjoyed the facilities of 'question-free' investment but not complied with the relevant order of 2009, he said. The facility of investment in share market without any question by tax men was offered in June 2009. The opportunity was withdrawn in fiscal 2010-2011. "The investors in the capital market were expected to keep their share-holdings until 2011 to make their investment to be treated as capital gains," the official said. Those who sold out their shares in the period are subject to pay tax at normal rates, ranging from 10 per cent to 42.5 per cent, which the revenue board slapped for individuals and companies, he added. The CIC has also identified tax files of some of the sick companies that raised capital from the share market and disappeared later, he added. Those companies have floated shares in the capital market by presenting false audit reports that did not even get the clearance of the Securities and Exchange Commission (SEC), the official added. The NBR will treat those investments as business income, not capital gains, he added. The revenue board official said they have launched investigation on their own against suspects as mentioned in the report of the probe committee on the recent share market scam. "It is not interlinked with the report of probe committee. The tax intelligence team is moving with its own information collected from various sources," the official added.