The Income Tax department is working to improve the "abysmally poor" tax literacy in the country so that the number of tax paying people and entities can be increased leading to enhanced collections, CBDT Chairman J B Mohapatra has said.
He said the direct tax establishment — the government authority that primarily collects personal income tax and corporation tax among others — will do "everything possible" to see that the effective number of taxpayers who can add to the revenue kitty are enhanced.
"Banking literacy has gathered steam and people know what is a bank and how to open an account. Banks have invested in expanding the banking knowledge of the people. That thing has not happened in (income) tax and that is on top of our mind," he said.
The CBDT chief was asked about the steps being taken by the taxman to widen and deepen the tax base in the country given that the department recorded its highest-ever direct tax collections at over ₹13.63 lakh crore (as on March 16) during the current financial year.
He said the I-T department recently, on the intervention of Union Finance minister Nirmala Sitharaman, concluded a fortnightly 'mulaqat' event in the far off and remote areas of Jammu and Kashmir where the department met locals and told them about the department and its work.
"People's knowledge about the tax department, what it stands for, how does a taxpayer and a potential taxpayer help in national development and subsequently the taxpayer adds his share to the growth of the economy, all that has to be culturally percolated to the taxpayers or the potential taxpayers and then things will dramatically change in the department," Mohapatra said.
He added that the department will undertake outreach programmes and take the help of various modes of mass communication and multimedia to take the work and idea of the department among the people.
Quoting latest data, the CBDT chief said income tax return (ITR) filing numbers are roughly 7 lakh crore of which about 4 lakh crore are from the TDS (tax deducted at source) category.
The taxpayers' profile in India is that more than 92 per cent filers are in the 0-Rs 10 lakh gross total income bracket, beyond ₹10 lakh-50 lakh is 6-7 per cent and from ₹50 lakh to ₹5 crore is 0.6-0.7 per cent and beyond ₹5 crore of gross total income it is around 28,000-31,000 filers.
"The effective number of good taxpayers who can add to the tax kitty is our aim and for that, we will do everything possible," he added.
Sitharaman had recently informed the Parliament that India had 8.22 crore taxpayers, which included individuals and corporates.
"Total number of taxpayers for AY (assessment year) 2020-21 is 8,22,83,407. The projected total population of the country as on March 1, 2021 .... was 136.30 crore," she said.
The number of taxpayers includes people who pay income tax and corporate tax and who have either filed an ITR or in whose case tax has been deducted at source (TDS).