Income Tax Evaders? Beware!

 

The Central Board of Direct Taxes (CBDT) uses artificial intelligence and data analytics to detect cases of tax evasion. As per information in print media, IT department might deploy the non-filers monitoring system (NMS) to nudge people to file their income-tax returns. Some of the tools include:

• Statement of financial transactions
• Tax deduction at source
• Tax collected at source
• Details of foreign remittances
• Trade data and NMS.

“It is surprising that in a country of over 132 Crore population, only 8 Crore pays income-tax (in assessment year 2020-21). The number of taxpayers in the higher tax slabs are even lesser. In this digital era, detection of tax evasion is not very difficult,”.

The government may intensify its exercise to identify people who undertake high-value financial transactions but avoid filing tax returns. The move comes despite the government expecting robust income-tax collection in the financial year, as it wants to widen the tax base, which is a mere 8 Crore.

“In our country great doctors, lawyers, chartered accountants, and a number of professionals who are proficient in their respective fields, are serving the nation. But it is also a fact that there are only 2,200 professionals in the country who declare their annual income to be more than ₹1 crore,” PM had mentioned in one of the speech.

The department started an initiative where, people who do not file tax returns are asked to assess their tax liabilities for the given assessment year and either file returns or submit an online response within a stipulated time, which is generally three weeks. In case of no response, the department may initiate proceedings as per the law.

As on mid-March 2022, over 6.63 crore tax returns have been filed for assessment year 2021-22, which shows less than 3% growth compared to the same period the previous year, according to latest official data.

The net direct tax collection up to mid-March for financial year 2021-22, however, showed over 48% jump at ₹13.63 lakh crore, compared to ₹9.18 lakh crore in the corresponding period of the preceding financial year.

The net direct tax collection of ₹13.63 lakh crore on March 16 includes corporation income-tax at ₹7.19 lakh crore and personal income-tax, including security transaction tax at ₹6.40 lakh crore, according to CBDT. The net collection in 2021-22 so far is over 9% higher than the revised estimate of ₹12.50 lakh crore.

The gross direct tax collection before adjusting refunds, for 2021-22 was ₹15.50 lakh crore on March 16, compared to ₹11.20 lakh crore in the corresponding period of the preceding financial year.

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