He said concerns about the state of the economy, battered by the spread of COVID-19, were belied because it “did so well and businesses came out so well (in paying taxes)” during the current fiscal year 2021- 22.
Reforms implemented by the government within the Income Tax Department and the “strengthening” of the Indian economy are among the key factors that led to the highest-ever direct tax collections in the country, amounting to more than Rs 13.63 lakh crore, CBDT President JB Mohapatra has said.
He said concerns about the state of the economy, battered by the spread of COVID-19, were belied because it “did so well and businesses came out so well (in paying taxes)” during the current fiscal year 2021- 22.
Mohapatra expressed confidence that the elimination of direct taxes, which mainly includes income tax and corporate income tax, will continue the current streak and that the department will be able to successfully pursue the target of raising Rs 14.20 lakh crore. taxes to be collected in the following tax
“It will be very difficult to say how things will play out in the coming year, but there is no room to say that good times only last four quarters,” Mohapatra told PTI in an interview.
The Central Board of Direct Taxes (CBDT) is the governing body for the IT department and according to the March 17 announcement, direct tax collections (as on March 16) in India broke all previous records. The CBDT chief listed the reasons he believes led to the record collections.
“The first is strengthening the Indian economy. The better the economy, the better the tax hike that is happening now.”
“The second reason will be that the reforms implemented by the various departments will affect the tax authorities’ own collection numbers,” he said.
There are policies that have been taken over time, in the budget or off-budget, that are now producing the “rebound effect” or dividends, Mohapatra said.
“The third reason, I would say, is the reforms within the department… which have been continuous for the past four years. “Probably we have changed more than ever in the history of this department and it will take time for these reforms to pick up steam and deliver results,” he said.
Mohapatra said that after three to four years of working on the reforms, both taxpayers and the ministry are becoming acquainted with the new processes and procedures and that they are “slowly paying off”. “So the point is, once activated, the reforms don’t deliver immediate results, but it takes time to sink into the head, awareness and also the operational culture of the department. So now is probably the time when we see the results of the reforms in the department,” he said.
The fourth factor, Mohapatra said, was “small but important” and relates to the introduction of technology into the IT department. “For example, the Annual Information System (AIS) in which more and more information about the financial transactions they would have made in the year is now being delivered to the taxpayer. This moves them towards voluntary compliance.
“Out of the more than Rs 13.63 lakh crore collection (as on March 16), only about Rs 54,000-55,000 crore is from regular assessment tax (which includes tax paid by the appraiser after the department has notified them of this ). “The rest of the collection is voluntary. This is happening because taxpayers are given more powers with the financial information available to them,” he said.
Taxpayers used to “struggle” to get this information, but now they have it at their fingertips, the CBDT chief said.
“So this has also helped taxpayers pay the right amount of taxes,” he said. Mohapatra said that by the end of this fiscal year on March 31, the net or actual tax collections, after issuance of the refunds due, should be “more than Rs 13.5 lakh crore”.
The IT department was given a target to collect Rs 11.08 lakh crore (budget estimates) this fiscally and it was later revised to Rs 12.50 lakh crore.
Mohapatra said the collections among all heads were the highest this time. He gave a break to substantiate his point.
This year till March 16, the collection under the pre-tax category was Rs 6.62 lakh crore, which is 40.7 percent more than 2020-21, 50.6 percent more than 2019-20 and 30.8 percent more than 2018-19 , he said .
Similarly, the collection under the Tax Deducted at Source (TDS) category stands at Rs 6.79 lakh crore which is 37.7 percent more than 2020-21, 40.5 percent more than 2019-20 and 51.9 percent more than 2018-19, he added. The collection under the self-assessment tax (SAT) category, Mohapatra said, stands at Rs 1,34318 crore, which is 34.9 percent higher than 2020-21, 36.1 percent higher than 2019-20 and 42.9 percent higher than 2018 -19.
Under the regular tax category, he said, the collection is Rs 55,238 crore – 46.5 percent more than 2020-21 and 8.9 percent more than 2019-20. 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 in the revised estimates it was increased to Rs 20,000 crore, the CBDT chief said.
“We are over Rs 22,000 crore (by March 16). Thus, all components, sub-components, gross and net numbers are the highest to date in the department’s history.
“These are very large numbers and this comes at the most appropriate time in the history of the department,” he said.
Mohapatra said the department has not yet completed a “sector analysis” to say how different parts of the economy have fared.
“Industries that have done well are those that are doing well in the current era, such as banking. However, we have yet to complete the sector analysis. I’ll come back later to say which sectors have done well and which have not,” he said.
This post Reforms in IT department, ‘strengthening’ economy led to record tax collections: CBDT chairman
was original published at “https://www.financialexpress.com/money/reforms-in-i-t-dept-strengthening-of-economy-led-to-record-tax-collections-cbdt-chairman/2465285/”
