New taxpayers, disclosures, tech help push direct tax mop-up: CBDT Chairman

About 60-70 per cent of the taxpayers are expected to shift to the new tax regime, the CBDT Chairman said. “As of now, we don’t know the exact adoption. Let us wait till 2024 for individuals. For corporates, they have shifted 60 per cent of the profits to the new tax regime. In personal income tax, we hope about 60-70 per cent of the individual taxpayers will shift to the new regime. July 31, 2024 is when we will come to know how many have shifted to the new regime,” he told reporters during an interaction.

The government had made changes to the new tax regime in this year’s Budget to make it more attractive compared to the old tax regime (with exemptions and deductions). Under the new tax regime, tax rebate limit was increased to Rs 7 lakh per year from the earlier Rs 5 lakh. The government had also extended the benefit of standard deduction of Rs 50,000 to taxpayers under the new tax regime.

Out of the total direct tax revenue so far, Rs 16,300 crore has been collected from the Securities Transaction tax (STT), which is 14.4 per cent higher than Rs 14,250 crore in the year-ago period. About Rs 600 crore has been collected from the tax deducted at source (TDS) levy on online gaming in the first six months of this financial year, which was introduced from April 1 this year. Also, the TDS levy on virtual digital assets has resulted in revenue of Rs 105 crore so far, he said.

Including the collections from the STT, the growth in personal income tax revenue is 29.08 per cent so far this fiscal, the income tax department said. “After adjustment of refunds, the net growth in CIT collections is 12 39 per cent and that in PIT collections is 32.51 per cent (PIT only) and 31 85 per cent (PIT including STT). Refunds amounting to Rs 1.50 lakh crore have been issued during April 1, 2023 to October 9, 2023,” the income tax department said.

Around 35 lakh cases of refunds are currently held up with the Income Tax Department due to discrepancies related to validation of the taxpayers’ bank accounts, Gupta said, adding that the tax department is reaching out to such taxpayers through e-mails and phone calls through a special call centre.

On taxpayers receiving tax demands dating back to 2010-11 at the time of issuance of refunds this year, Gupta said the department had undergone a technology shift around 2011 from paper-based registers to computers, which has resulted in some of these previous tax demands showing up now.

“We have started a unique demand management facilitation system about a year back for all such cases where refunds are held up due to a variety of reasons. An email is triggered to the taxpayer saying they will get a call three days from the dispatch of the email from a particular number and following this conversation, the issues are being resolved,” he said, adding that the department has resolved 1.4 lakh such entries over the last year following this Mysuru-based call centre interaction and the taxpayer can either accept the demand or contest it.

For AY 2023-24, a total of 7.27 crore income tax returns were filed, out of which 7.15 crore have been verified and 6.80 crore have been processed.