A report by the Central Board of Direct Taxes (CBDT) said that the Income Tax Department (I-T Department) has mopped up over half the kitty of the targeted direct tax revenue for this fiscal — at more than Rs 6.63 lakh crore — riding at a record high growth rate of last seven years. This was also said to be propelled by demonetisation.
CBDT is the policy-making body for the I-T Department. The report on the “impact of demonetisation” states that the 2016 exercise of invalidating the two high-value currencies of Rs 1,000 and Rs 500 has thrown up a large tranche of data and credible information. Based on these details, enforcement actions, including search and survey, are being conducted by the tax department with a great degree of success against tax evaders.
The report said the department has till now (updated till November 15) made a gross collection of Rs 6.63 lakh crore in the direct taxes kitty this fiscal, which is 16.4 per cent higher than the gross collections for the corresponding period of last year.
This, according to the report, was a positive impact of demonetisation.
The direct taxes revenue collection target for the 2018-19 financial year is Rs 11.5 lakh crore and the authorities are left with four months to achieve the target by the closing of the fiscal on March 31 next year.
The report added that there has been a sustained increase in the number of income tax returns (ITRs) filed in the last four financial years as compared to 3.79 crore ITRs filed in 2013-14 fiscal. The number of ITRs filed during 2017-18 fiscal has increased by 81 per cent to 6.87 crore.
It said that the department was able to widen the tax base by not only witnessing an increase in the number of ITRs filed but also by the enhanced number of new ITR filers. The number of ITR filers increased to 1.07 crore during 2017-18 as compared to 85.51 lakh new ITR filers added during 2016-17 fiscal. Thereby, recording a growth of 25 per cent.
The report added that the net direct tax collections grew by 18 per cent in 2017-18, at Rs 10.03 lakh crore, from 2016-17.
“The growth rates in 2015-16 and 2014-15 were only 6.6 per cent and 9 per cent respectively. The growth rate of 18 per cent in direct tax collections for 2017-18 is the highest in last seven financial years,” the report said.
It added that the revenue flow from the advance tax and self-assessment tax category has been exceptional over the last few years as during 2017-18 the personal advance tax collections increased by 23.4 per cent and personal self-assessment tax grew by 29.8 per cent over the 2016-17 period.
“These figures were extraordinarily high for the 2016-17 period. Demonetisation and the subsequent use of bank deposit data by the I-T Department had a major impact on voluntary tax payments by the non-corporate/individual taxpayers,”,” the report said.
The report talked about the current fiscal saying the gross corporate advance tax has increased at a rate above 16 per cent and the personal advance tax increased over 30 per cent.
Talking about enforcement action (notices, raids and surveys) initiated post the note ban, the report said that about three lakh notices were issued to those individuals in whose bank accounts large amounts of cash was deposited post-demonetisation but no return of income was filed.
“Returns in 2.1 lakh such cases (about 70 per cent) have now been filed by the taxpayers and substantial self assessment tax has been paid by such taxpayers even as action in the balance 30 per cent cases is under way,” the report said.
It adds that a total of 20,500 cases were picked up for “scrutiny” by the authorities this year, post the note ban.