Even after recording impressive collections, the Income Tax Department has a major concern. The arrear demand, including demand not fallen due as on March 31, 2024, has surged to more than ₹43 lakh crore as on April 1, 2024 from over ₹24.51 lakh crore last April.
“This is a very steep rise and it requires urgent action,” a senior tax official told businessline. Now, as a part of Central Action Plan, there will be a special campaign to reduce the arrears. He added that out of the arrear demands of over ₹43 lakh crore, the top 5,000 cases of arrear demands cover almost 60 per cent of the total demand. This warranted deeper and quick analysis of these cases across the country, he added. Accordingly, a time-bound action plan has been prepared with a list of cases now being provided to each of the Principal Chief Commissioners of Income tax (Pr. CCIT).
According to another official, Pr. CCIT will constitute a special team to provide analytics of cases falling in the top 5,000 identified by the CBDT and this, the official said, needed to be done by September 30. Then, an exercise to help categorise different kinds of demand will follow and this, in turn, will be followed by the execution of 7-point plan. In case of demands under litigation with the Income Tax Appellate Tribunal (ITAT), High Courts or the Supreme Court, a follow-up will be done by Standing Counsels to get ‘bunching’ done and get cases fixed early based on the amounts locked up in litigation.
Those cases will then be taken up where ex-parte orders have been made and where appeals have been filed. Demands from the last 3 years can be pursued (where possible) with specific strategies, the second official added. Cases where rectification and Appeal effects have to be given will be identified. The deadline of September 30 has been fixed to expedite transfer of rights in such cases. Next, cases more than 10 years old will be taken up in which the demands could not be recovered despite efforts. “The department may consider write-off proposals or more aggressive follow-up in coordination with banks and financial institutions with the help of the Investigation Wing,” the official said.
It has been planned to locate physical records and analyse the nature of demands and other details pertaining to the top 5,000 list falling in each Region/Jurisdiction. At the same time, a detailed report has been sought from the jurisdictional officers about cases where the assessee is considered not traceable so that a separate strategy can be considered for such demands. All these will help prioritise and manage the cases, he added.
Last week, the Income Tax Department said that direct tax collection surged about 22 per cent to over ₹6.93 lakh crore between April 1 and August 11 of the current fiscal. This is the net collection figure arrived at after deducting refunds from gross collection. During the period, gross collection rose to over ₹8.13 lakh crore from ₹6.55 lakh crore. Refunds also grew to over ₹1.20 lakh crore from ₹90,000 crore showing a growth of more than 33 per cent.
For the current fiscal, corporation tax is estimated at ₹10.20 lakh crore, indicating a growth of 10.5 per cent over the Revised Estimates of FY 2023-24. Similarly, Personal income tax is estimated at ₹11.87 lakh crore in BE 2024-25 which is higher by 16.1 per cent over RE 2023-24.