Tax trouble: 65 lakh people face government crackdown

The Central government's steps seems to be yielding results as its drive towards ensuring tax filing has helped it garner additional Rs 1.5 lakh crore in direct taxes during 2017-18. The initiative has witnessed a record number of new filers, but the tax department is still chasing 65 lakh people who it suspects did not file returns last year, said a Times of India report.  
 
According to the report, the taxpayer base includes those who file returns in addition to those with tax deducted at source (TDS), tax collected at source (TCS), advance tax payments, self-assessment tax and dividend distribution tax during the previous three financial years. The government steps, including text messages and email campaigns, have reportedly helped it expand the base with the authorities expecting an addition of over 1.5 crore new entities during 2017-18 and expanding the base, net of exits by over 12 per cent, . 
 
A large part of this increase will be on account of 1.07 crore individuals who filed their returns for the first time in 2017-18, which the government believes is partly driven by the demonetisation drive in 2016, officials told TOI, adding that the government had mopped up Rs over Rs 10 lakh crore as direct taxes, compared to a shade under Rs 8.5 lakh crore in 2016-17. Despite several reminders, the report said that there are many who have not filed their returns and are on the tax department's radar for the current financial year. 
 
The department in its analysis has reportedly concluded that of the nearly 6.8 crore returns filed in 2017-18, nearly a fifth related to previous years as was the case earlier too. Officials reportedly said that the text messages and emails were targeted at close to 1.75 crore "potential assessees" of which 1.07 crore have voluntarily filed returns so far. Going by this measure too, the numbers add up, said the report. 
 
According to the report, some of the "potential assesses" are likely to be targeted through the non-filers management system (NMS) that the department has deployed over the past few years. One of the focus areas will be those who had deposited Rs 10 lakh or more in old Rs 500 and Rs 1,000 notes, but did not file their returns. 
 
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Of the over 3 lakh people in this category, around 2.1 lakh have reportedly filed returns and paid close to Rs 6,500 crore in the self-assessment tax.