Tax and India are slowly but surely arriving at reconciliation terms. This is echoed in a recent statement made by a government official. The official said, “The taxman is placing greater trust in taxpayers“. This comes as a relief in more than one ways. The tax scrutiny data of the last two years shared by Sushil Chandra, Chairman Central Board of Direct Taxes, further approves these claims:
- In 2016-17, 0.8-1% of the total income tax returns filed were under the tax department scanner
- In 2017-18, this fraction reduced to 0.35%. Also of these only, 0.2% were grouped for full scrutiny. The remaining 0.15% were subjected to limited scrutiny only.
But does this actually mean that all is well now and tax evasions are a thing of the past?
Well as they say life looks good only on the surface, the tax returns scrutiny process is set to become more accurate but without causing any offence to the taxpayers. All thanks to technology now, the taxpayers will not be subjected to probes and scrutiny by the taxman. In fact, the tax department aims to deploy more taxpayer-friendly and non-intrusive ways to check tax evasion in the future.
While addressing a conference organized by the Associated Chambers of Commerce and Industry of India Sushil Chandra, Chairman Central Board of Direct Taxes, said “The lower percentage of scrutiny reflects the faith the tax department has in taxpayers. But it doesn’t mean that tax evaders can go scot-free”. However, he also stated that the tax department will be employing data mining and analytics to identify tax evaders in the future. The enforcement units are also being accordingly strengthened. Mr Chandra also shared a few key data figures in this regard:
- The total number of prosecution cases have grown fourfold, up from 1200 in 2016-17 to 4700 in the current year. The figure for 2015-16 stood at 500.
- Scrutiny Notices have gone down considerably. However, notices under Section 148 have increased. This increase is driven mainly by Data Analytics.
- 309,000 notices were issued last year on the basis of insights from demonetization data
Read Also: How to Reply Income Tax Compliance Notices? (Easy Guide)
The GST effect is also multiplying with each financial year. This can be seen in the increasing tax compliances. As opposed to 54.3 million returns filed in 2016-17, the recorded number for tax returns filed in the 2017-18 stand at 68.6 million. These are positive return figures and strengthen the Government’s target of expanding the reach of formal sector economy.
