The Income Tax Department in India, under the leadership of Nitin Gupta, Chairman of the Central Board of Direct Taxes (CBDT), is gearing up to issue notices to individuals who have failed to file tax returns despite having taxes deducted at the source from their incomes. This initiative aims to address inconsistencies and enhance taxpayer compliance.
Gupta revealed that around 15 million taxpayers fall into this category, and the department plans to selectively send notices, focusing on cases where concrete information is available. This targeted approach is expected to yield results with just a few thousand notices being sent out initially.
Utilization of Data and Outreach Efforts
The influx of extensive data has empowered the IT department to detect discrepancies, leading to outreach efforts to encourage taxpayers to update their returns. Gupta highlighted that such efforts have already resulted in ₹4,600 crore collected from 5.1 million updated returns, demonstrating the effectiveness of proactive measures.
Enhanced Taxpayer Services
In line with its commitment to improving taxpayer services, the CBDT is expediting refund processes, updating returns, and resolving significant tax disputes. The establishment of a demand management center in Mysuru, Karnataka, exemplifies the department's proactive approach, resolving numerous cases since its inception and now expanding its scope nationwide.
Budget Proposal Implementation
The CBDT plans to enact the budget proposal concerning the withdrawal of small outstanding tax demands up to ₹25,000 until FY15 through a comprehensive circular. This move aims to streamline tax processes and alleviate burdens on taxpayers.
Transition to New Tax Regime
Gupta noted that 60% of taxpayers have transitioned to the new tax regime introduced in the February 2022 budget. The department intends to monitor taxpayer responses and filing trends before considering any adjustments to tax rates, ensuring a smooth transition for taxpayers.
Additional Disclosure Requirements
Recent requirements for high-income taxpayers to furnish additional details in their returns stem from recommendations made by the Public Accounts Committee or the Election Commission of India. These disclosures include providing the Legal Entity Identifier (LEI), details of contributions to political parties, and information on deductions claimed for dependent care, including medical treatment for disabilities.
The Income Tax Department's proactive measures, under the leadership of Nitin Gupta, signify a commitment to enhancing taxpayer compliance and services. With targeted notices, utilization of data-driven approaches, and initiatives to streamline processes, the department aims to foster greater transparency and efficiency in the tax system while ensuring taxpayer welfare.