Taxmen get busy with stiffer target UPHILL TASK: DIRECT TAX COLLECTIONS

Adopts multi-pronged strategy to collect 15.7% more direct taxes this year

Ahead of an uphill collection target for the current financial year (FY18), the income tax department has prepared a multi-pronged strategy to achieve 15.7 per cent growth, without any amnesty schemes that provided a buffer last year. There’s also been a reduction in the rate for the lowest income slab.

The strategy includes litigation management, disposal of high-value cases, scaling up of searches and seizures, strengthening of systems and investigation teams, and tying with global data mining companies for information gathering.

The department has a collection target of ~9.8 lakh crore for 2017-18, up 15.7 per cent, compared with growth of 14.3 per cent in 2016-17. The rate on annual income between ~2.5 lakh and ~5 lakh has been cut to five per cent from the earlier 10 per cent.

“The compliance rate has shown an improvement after demonetisation, which will also facilitate higher collection. Litigation management, arrears recovery, information gathering and enforcement action will be the top areas of focus,” said a senior official. The commissioner (appeals) has been asked to expedite clearance of high value cases of ~50 crore and above. “We want such cases to be decided early. If the sum is to be freed, take a decision early. If it needs to be recovered, that too we should know early, to devise a strategy,” said the official. The number of surveys and searches has been scaled up from the beginning of the year. “People know that black (undisclosed) money will not be tolerated any more. So, we expect an improvement in the compliance rate,” added the official.

Advance tax paid by individuals was 40 per cent higher in the financial year’s first, June, quarter. This could be an after-effect of the demonetisation of high-value currency, with more non-corporates recording higher incomes in their books of account. E-filing of returns up to June for 2016-17 grew by 18 per cent, suggesting that more people regularised their unaccounted income.

In an unusual move, the CBDT Chairman Sushil Chandra got a one-year extension this May. This is expected to help work on a longer term strategy for increasing the tax base, currently 55 million. Systems and investigation teams were strengthened in a major reshuffle last week involving 315 officers.

The department says it has already identified cases where individuals and entities had attempted to regularise their unaccounted money by revising their returns for the previous financial years. (~ lakh crore)