The debate over the effectiveness of Demonetisation has remained a see-saw affair amidst changing goal posts. Today the currency circulation is at par with pre-demonetisation levels but the reasonability behind the November 08 decision deserves a closer unbiased look. A positive thing to come out of the move to defunct high-value currency has been the increase in India’s direct tax base which has contributed to a significant increase in tax revenue.
The Tax Chairman’s View
Sushil Chandra, Chairman Central Board of Direct Taxes (CBDT), says, “If you see, last year contribution of direct taxes was 52 percent and the contribution of indirect taxes was 48 percent. This has happened after many years that the contribution of direct taxes is more than the indirect taxes”. Further, while inaugurating one of the IT Department stalls at the ongoing International Trade Fair at Pragati Maidan, the Chairman added that money deposited into bank accounts during Nov-Dec 2016 is tracked and matched with corresponding returns of the account holder.
The IT Department Whip
The IT Department has also remained on its toes during the last two years. It has until now identified nearly 80 lakh people who have failed to file ITR returns post demonetization. Among these, it has zeroed in on 80,000 cases for a closer scrutiny. The various steps taken by the tax department in this regard include:
- Nearly 3 lakh Statutory Notices to particular individuals who failed to file ITR post-demonetization.
- E-mailers and SMSes to 2.25 lakh individuals who filed returns post IT Department Notice.
- Assessment of remaining 80,000 cases where returns were not filed.
Post-demonetization exercise, the IT department has also planned an iron hand treatment of those who have failed to file IT returns on time. Nearly 30 lakh taxpayers who have failed to file returns have been reminded of their tax liabilities via SMSes. In case the assessees still fail to adhere to their tax liabilities, the department will fire notices to each and every Assessee.
The tax department also welcomed about the 86 lakh new Assessee to the tax base this year. The CBDT Chairman said that the credit for the same goes to the IT departments non-intrusive methods. “I am expecting large no of returns (in the coming days). In the total 6.02 crore returns filed this year, there are 86 lakh, new taxpayers,” Mr. Chandra said.
The Target
Tax Revenue is an important accelerator for effective implementation of welfare and infrastructure policies. From ensuring timely TDS payments to identifying 80 lakh persons who did not file ITR in the current finance cycle, the tax department has its eye set on achieving all of its revenue targets by March 2019.
Read Also: Step by Step Guide To File Income Tax Return
Mr. Chandra further said, “We have also identified around 80 lakh persons who had filed returns in last three years but they have not filed it so far. We are reviewing each and every region where targets are not being met. I have already written to all the regions and they are taking necessary steps. Similarly, we are also chasing advance taxpayers and we are intimating them that please deposit your tax”
