Even as it steps up efforts for prosecution against tax evaders, the income-tax department has chosen to opt for a lower level of scrutiny of income tax returns. Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra on Thursday said that the income tax department has picked up only 0.35 per cent of the 6.86 crore returns for scrutiny filed for 2017-18.
Chandra said that the department has faith on the income tax payers, but will not allow evaders to scot free. “We have increased the tax base and have full faith on taxpayers. Last year, we got 6.86 crore returns and I have picked up only 0.35 per cent cases for scrutiny. This means that 99.65 per cent of the returns filed can be at peace,” Chandra said at an Assocham event here. He said out of this 0.35 per cent cases picked up for scrutiny, 0.15 per cent are for ‘limited scrutiny’ and 0.20 per cent are for ‘full scrutiny’. “This shows that in only high tax evasion cases, we will go for scrutiny,” Chandra said. Earlier, about 0.8 per cent-1 per cent of the income tax returns filed were picked up for scrutiny by the department.
Chandra said less number of cases being picked up for scrutiny means that the tax department has full faith on people. “We are also making our enforcement unit stronger so that if there is a case of tax evasion, that will be dealt with severely”. The tax authorities have filed 4,700 cases for prosecution last year on the basis of data with the department, he added.
Chandra said taxpayers should be honest with the details since information sharing has made it easier to nab evaders. “You can send your money to any tax haven or any country but we have also got system of automatic exchange of information with many countries…nobody is going to escape, we have information. People (tax evaders) think that boundaries are too far off, but it is very clear that the economic boundaries of different countries are very close to each other,” Chandra said.
On the notices sent to tax assessees based on the post-demonetisation deposits data, Chandra said that the department will file assessment orders if they have not filed returns. “We have issued 3.09 lakh notices last year on the basis of demonetisation data and many persons have filed returns into that and many will have to file returns, otherwise we will frame assessment orders,” he said. The department will further simplify tax filing norms to help India improve its ranking in the Ease of Doing Business Index, the chairman said. “Compliance will have to be better. Enforcement will have to stronger. Based on the data with us, we are taking enforcement action to instill some fear in the mind of tax evaders,” Chandra added.
In 2017-18, the CBDT has collected Rs 10.03 lakh crore revenue on account of income tax and corporate tax, a growth of 18 per cent over last year.