With direct tax collection falling short of the target, the Finance Ministry has begun sending notices to over 35,000 people for not filing tax returns. They were identified on the basis on high spending among other indicators.
A statement issued by the Finance Ministry said that a total of 12,19,832 ‘non filers’ linked to more than 4.7 crore pieces of information on financial transactions have been identified.
“In the first batch, letters are being sent to 35,170 PAN holders by the Directorate of Intelligence and Criminal Investigation,” it added.
The letter contains the summary of the information of financial transaction(s) along with a customised response sheet and seeks to know whether the person had filed his Income Tax return or not.
A nodal cell has been set up to capture the response and take follow-up action. There will be an online monitoring system to ensure follow-up action and track return filing and tax payment of the target segment.
This is the result of a business intelligence project undertaken by the Directorate of Systems of the Income-Tax Department.
This project involves identification of Permanent Account Number (PAN) holders who have not filed Income Tax Return and about whom specific information is available through Annual Information Return (AIR), Central Information Branch (CIB) data and TDS/TCS Returns.
Information in the Cash Transaction Reports (CTRs) of FIU-IND has also been included as part of this data matching exercise, the statement said.
This entire exercise could be seen as the effect of Revenue Secretary Sumit Bose’s statement made on December 10 last year. He had said, “there is no advantage in suppressing the true income or avoiding paying income tax that is due because, sooner or later, the information available with the Income Tax Department will lead the department to the doors of such persons.”
Even Finance Minister P. Chidambaram has repeatedly emphasised that there is need for a non-intrusive tax administration to enable the tax payer to file his return and pay appropriate taxes. Now the Ministry has once again urged all tax payers to disclose their true income and pay appropriate taxes within the current financial year.
The Finance Ministry is facing tough task to meet the direct tax target. It managed to get Rs. 4.55 lakh crore during April-January 2012-13 as against Rs. 4.25 lakh crore in the same period of previous fiscal.
This shows a growth of little over seven per cent, while the budgeted target requires 15 per cent growth rate.