With almost 91 lakh new taxpayers brought in the tax net last fiscal, the CBDT has asked the Income Tax Department to increasingly identify those who can pay tax but are not doing so, with a special focus on smaller cities.
Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra has written a letter to his regional I-T heads across the country asking them to “maximise” efforts for widening of the tax base during the current financial year of 2017-18. The CBDT frames policy measures for the tax department.
“Huge opportunities for identification of potential taxpayers have been opened up by data mining and data analytics conducted (by the department) in the wake of demonetisation and operation clean money,” Chandra said in the letter, which has been accessed by PTI. Calling widening of tax base as one of the “most important” policy objectives of the CBDT, he said various steps have been taken to increase the tax base which have shown appreciable results.
“It is quite encouraging to note that almost 91 lakh new taxpayers were added during financial year 2016-17. However, considering the increase in economic activities, both in the organised as well as unorganised sectors, there is a large scope for further widening of the direct tax base in the country,” he stated in the letter.
A senior official privy to the development said while no targets have been set by the CBDT in this context, it is estimated that about two crore fresh taxpayers could be easily added to the I-T net within this fiscal, if these measures are effectively implemented.
At present the I-T department has about 6-7 crore registered taxpayers.
The CBDT boss asked the taxman to tap data provided by the data mining and non-filers identifying database of the department, gather local intelligence, obtain inputs from market associations, trade bodies and others to find out more such people who are eligible to pay income tax but are not doing so.
Data from the intelligence and criminal investigation wing of the department and from the operation clean money should also be used, he said, to send “request letters” to all potential taxpayers expeditiously and in a time-bound manner. He suggested that the tax officers can hold public sessions in this context.
“Awareness meetings and outreach programmes may also be used for supplementing these efforts so as to encourage voluntary compliance, especially in tier-2 and 3 cities,” the CBDT chairman wrote.
Tier-2 and tier-3 cities are those which are slightly smaller in population density and working human resource as compared to the metro cities of Delhi, Mumbai, Chennai, Bengaluru, Hyderabad, Pune and few others. He also asked the I-T chiefs to develop a “regional strategy” in line with the specific profile of the area under their jurisdiction to “significantly widen the tax base this year.”