The reforms undertaken by the government within the Income Tax Department and “strengthening” the Indian economy are among the key factors that have led to the highest ever direct tax collections in the country, exceeding ₹13.63 lakh crore, CBDT Chairman JB Mohapatra has said.
He said fears about the state of the economy hit by the COVID-19 spread were allayed as it “did so well and corporates came out so well. [in paying taxes]”During the current financial year 2021-22.
Mr Mohapatra expressed confidence that the direct tax collection, which mainly comprises of personal income tax and corporation tax revenue receipts, would continue its current streak and the department would be able to successfully chase the target of collecting Rs 14.20 lakh crore in taxes. . next financial.
“It will be very difficult to say how things will be next year, but there is no room to say that good times last only for four quarters,” said Mr. Mohapatra. PTI in an interview.
The Central Board of Direct Taxes (CBDT) is the administrative body for the IT department and as of its March 17 announcement, direct tax collection in India (as on March 16) broke all previous records.
The CBDT chief listed the reasons which he believes led to record collection.
“First is to strengthen the Indian economy. The better the economy, the better will be the tax collection, which is happening now.” “The second reason would be the reforms carried out in the departments that have an impact on the tax department’s own collection numbers,” he said.
There are policy measures that have been taken over a period of time, in budget or out of budget, and are now paying a “rebound effect” or dividend, Mr. Mohapatra said.
“The third reason, I would say, would be reforms within the department… which have been consistent over the last four years.
“Perhaps, we have changed more than ever in the history of this department and it takes a while for these reforms to take off steam and create results,” he said.
Mr Mohapatra said that after working on reforms for three-four years, both the taxpayers and the department are getting acquainted with the new processes and procedures and they are “gradually bearing fruit”. “So, the point is that reforms, once initiated, do not produce results immediately, but take time to sink into the mind, consciousness and operational culture of the department. We are seeing the results of the reforms,” he said.
The fourth factor, Mr Mohapatra said, was “small but important” and pertains to technology inclusion in the IT department.
“For example, the annual information system [AIS] In which more and more information about the financial transactions done by him in the year is now being given to the taxpayer. This is leading them towards voluntary compliance.
“Out of collections of over Rs 13.63 lakh crore” [as on March 16]Only ₹54,000-55,000 crore has come from Regular Assessment Tax [under which tax is paid by the assessee after department issues notice to them],
“The balance collection is coming through voluntary compliance. This is happening because taxpayers are getting empowered with the financial information available with them.”
The CBDT chief said earlier taxpayers used to “struggle” to get this information, but now it is within their reach. “So, it has also helped the taxpayer in paying the right amount of taxes,” he said.
Mr Mohapatra said the net or actual tax collection, “above ₹13.5 lakh crore”, should be settled after the issue of refunds due, by the end of this financial year on March 31. The IT department was given a target to collect ₹11.08 lakh crore (Budget Estimate) in this financial year and later it was revised to ₹12.50 lakh crore. Mr. Mohapatra said that this time the collection has been the highest among all the items. To confirm their point, they broke up.
This year till March 16, the collection under advance tax category stood at ₹6.62 lakh crore, which is 40.7% higher than 2020-21, 50.6% higher than 2019-20 and 30.8% higher than 2018-19, he said.
Similarly, the collection under Tax Deduction at Source (TDS) category is ₹6.79 lakh crore, which is 37.7% higher over 2020-21, 40.5% higher than 2019-20 and 51.9% higher than 2018-19.
The collections under the Self Assessment Tax (SAT) category, Mr Mohapatra said, is Rs 1,34,318 crore, which is 34.9% higher than in 2020-21, 36.1% higher than in 2019-20, and higher than in 2018. 42.9% more in – 19.
Under the regular tax category, he said, the collection is ₹55,238 crore – 46.5% higher than 2020-21 and 8.9% higher than 2019-20.
The CBDT chief said that for the STT (Securities Transaction Tax for Shares) category, the government had set a target of Rs 12,500 crore at the beginning of the year and it was increased to Rs 20,000 crore in the Revised Estimates.
“We (as of March 16) are in excess of ₹22,000 crore. So, all components, sub-components, gross and net numbers are the highest ever in the history of the department.
“This is a huge number and it has come at the most opportune time in the history of the department,” he said.
Mr Mohapatra said the department has not yet completed a “sectoral analysis” to be able to say how different sections of the economy have performed.
“The sectors which performed well would be those which are doing well in the present times like banking. However, we are yet to complete the regional analysis. I will come back later to say which areas have performed well and which have not.