The Income Tax Department is set to initiate a comprehensive drive against individuals and entities who are required to file their income tax returns (ITR) but have failed to do so. The department has identified approximately 1.52 crore individuals who have earned income or have had tax deducted at source (TDS) but have not filed their returns. The Central Board of Direct Taxes (CBDT) has instructed field formations to contact these defaulters starting from April 15.
Number of Taxpayers and Returns Filed
In the financial year 2022-23, there were approximately 8.9 crore taxpayers, but only 7.4 crore returns were filed. It is important to note that this figure includes revised returns as well. As a result, it is estimated that around 1.97 crore individuals did not file their ITR, despite having incurred tax deducted at source. Among these non-filers, 1.93 crore were in the individual category, 28,000 in the Hindu undivided family, and 1.21 lakh were firms, while the remaining fell into different other categories.
Identifying Non-Filers Through Bank Transactions
In some cases, the bank transactions linked to the Permanent Account Number (PAN) were significantly high, which necessitated the filing of ITR. The income tax department has obtained extensive data that has helped in identifying such non-filers and detecting any mismatches.
Field Officials Contacting Defaulters
Field officials have been directed to reach out to the identified individuals with accurate data and information. They will explain to them the importance of filing their ITRs and the consequences of non-compliance. The aim is to ensure that these defaulters understand the necessity of fulfilling their tax obligations.
Potential Taxpayers Receiving Tax Notices
The CBDT has identified approximately 8,000-9,000 potential taxpayers who have records of high-ticket purchases or significant cash deposits. These individuals are being sent tax notices for further investigation. If found to be willful defaulters, they will face penalties. However, taxpayers who can provide a legitimate reason for sudden income may need to provide an explanation or file a return accordingly.
Utilizing Data for Identifying Non-Filers
The income tax department relies on the vast amount of data it has received, which has been instrumental in identifying individuals who have not filed their returns. This data analysis helps in detecting any discrepancies and ensuring compliance with tax regulations.
Growth in Direct Tax Collection
In recent news, the CBDT reported a growth of 19.88% in net direct tax collection, reaching over ₹18.90 lakh crore until March 17. This includes Corporation Tax (CIT) at ₹9,14,469 crore (net of refund) and Personal Income Tax (PIT), including Securities Transaction Tax (STT), at ₹9,72,224 crore (net of refund). The increase in advance tax collection contributed to this positive growth.