Over 1.5 lakh persons have declared annual income above Rs 1 crore so far in assessment year 2018-19, up 69% from AY2014-15, Central Board of Direct Taxes (CBDT) chairman Sushil Chandra said on Thursday, but noted that the number was still too low for a large and fast-growing economy like India.
“The department is detecting under-declaration of income through an analysis of consumption patterns,” Chandra said at a conference organised by Assocham. Further, he said, while many of the people with income above Rs 1 crore were salaried, not many firms or associations were reporting income above the threshold. This was not commensurate with expenditure patterns being reported in the economy.
In the April-January period this year, 6.31 crore income tax returns have been filed, which is 37% higher compared with the corresponding period last fiscal. Among them, 95 lakh taxpayers have filed returns for the first time, Chandra said. In FY18, ITD had added 1.06 crore new taxpayers, and had targeted 1.25 crore additional new filers for the current fiscal.
“We see that GDP is growing, consumption is growing, all five star hotels are full but the number of persons filing income of more than Rs 1 crore, it is really pathetic,” Chandra said, and added that the ball was now in taxpayers’ court after the the department has already simplified the return filing system.
Speaking on the need to reduce litigation involving the income-tax department (ITD), Chandra said that 13,000 cases had been withdrawn from various adjudicating bodies after the government had raised the threshold last year for appeals to higher forum.
“…the pendancy is still high but the viable solution is disposal of more appeals and also raising limit (for appeal) further,” he said. The government had estimated that withdrawal of cases would lead to 18% reduction in number of cases under litigation.
Crediting extensive use of technology for widening taxpayers’ base, Chandra said it was possible to monitor non-filers, and the authenticity of income declaration of those filing returns. This was now being done in an non-invasive manner whereby taxpayers were intimated through messages on the e-filing portal, eliminating the need to visit tax officials in person.
For the current fiscal, the ITD launched non-filers management system (NMS) and identified persons who had engaged in high value transaction but had failed to file IT returns. In the 15 days since its launch, 33,000 persons filed returns for the first time while 3 lakh persons visited the e-filing website to check notices from the department.
“These cases don’t involve small quantum of tax liability. For example, a person made foreign remittance of Rs 10 lakh but failed to file returns. Similarly, another person purchased property worth Rs 30 lakh but didn’t file return. In another case, a person deposited Rs 10 lakh in bank accounts but hasn’t filed returns yet. We are showing them the mirror.. that look here.. this is your info with us..what you have to say about it,” Chandra said.
On the topic of black money stashed abroad, the CBDT chairman said that the department was receiving a huge amount of information on undeclared foreign assets of Indian citizens from countries like Hong Kong and Switzerland among others. India had entered into treaties with several countries to enable automatic exchange of information.
“I am surprised by the amount of people having foreign assets who have failed to declare it. By not declaring these assets in the FA schedule you are making yourself prone to prosecutions. If undeclared foreign assets are explained, you can go to prison for three years but if you can’t explain the source of these assets then one could be imprisoned for seven years,” Chandra said while adding that the time was long gone when undeclared foreign assets could remain hidden.
Speaking on prosecution cases launched by the department, he said that only 1,400 such cases had been initiated which wasn’t significantly high on a seven crore taxpayer base. Further, most of these cases were against persons who had been deducting TDS from employees but not depositing the same with the government.
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