The Central Board of Direct Taxes (CBDT) wants the Income Tax (I-T) department to recover at least Rs 5.11 lakh crore in outstanding tax demands in 2019-20 alone, according to its central action plan of fiscal 2020.
The total outstanding tax demand arrears of the I-T department stands at Rs 12.77 lakh crore as on April up over 14 per cent from a year ago. The stiff recovery target set by the CBDT, if achieved, can help the government to lower its fiscal deficit considerably.
Arrears of tax demands are demands raised against assessees in the past that have not been paid.
“… while the causative factors responsible for the huge tax arrears and its management need to be undertaken separately through centralised data management by using latest technology and advanced analytics, it is imperative that concerted efforts are made to reverse the trend of increasing arrear demand and to initiate the process of reducing the figure to more manageable levels,” said the CBDT in its central action plan.
The outstanding arrear demands has been gradually increasing every year. For instance, in March 2016 the outstanding tax arrears stood at Rs 9.29 lakh crore, in April 2017 it increased to Rs 10.52 lakh crore, Rs 11.20 lakh crore in April 2018 and Rs 12.77 lakh crore in April 2019. While it is not known, how much of the total outstanding tax arrears is recoverable, data compiled by CBDT shows that tax demands worth about Rs 1.15 lakh crore and Rs 87,961 crore have been stayed by courts and I-T authorities, respectively, till March 2019. Apart from these, at least 3.41 lakh tax appeals are pending with commissioners of income tax involving tax demands of about Rs 5.71 lakh crore.
The CBDT has directed principal commissioners of I-Tto formulate a plan for vacation of stay granted by courts and tribunals in appeals and early disposal of cases by July 31. It has asked tax commissioners to “personally attend” high court proceedings pertaining to assessees asking for staying tax demands. The CBDT has also set a target for cash collection out of the arrear demand. Under this the IT has to collect at least Rs 83,689 crore this fiscal. Out of this, Mumbai has to collect at least Rs 24,684 crore, Delhi Rs 18,513 crore, West Bengal and Sikkim Rs 4,802 crore and Bengaluru Rs 4,211 crore, among others.