In an effort to widen the tax base, the Central Board of Direct Taxes (CBDT) has targetted to add 1.3 crore new return filers in 2019-20. The target for 2019-20 is part of CBDT's Action Plan 2019-20.
The action plan says widening of the tax base is one of the key policy objectives of the CBDT. "In the financial year 2018-19 various initiatives were taken to increase the tax base and the number of new return-filers, which have shown appreciable results. About 1.10 crore new filers (persons who were not included in the filer base as at the beginning of the year and had filed returns during the year) were added during 2018-19," it says.
The number of people who filed return in 2018-19 was around 6.5 crore, up from 5.43 crore in the previous year with 1.1 new filers being added during the year. In 2017-18, around 97 lakh new persons filed their returns.
Besides increasing the tax base, the CBDT's action plan for 2019-20 also focusses on litigation management, improving compliance and enforcement.
Amit Maheshwari, Partner, Ashok Maheshwary & Associates LLP, says: "The strategy of the tax administrators is to build capacity to identify tax evaders and the non/less compliant taxpayers. Going forward, it is expected that stern actions would be taken against them."
Large number of litigations and arrear demands are a cause of concern for the department, which now targets to bring down the arrears by 40 per cent by next financial year.
Arrear demands - tax demand made by the department but not paid by taxpayers for any reason - have gone up from Rs 11.20 lakh crore as on 1 April 1, 2018 to Rs 12.78 lakh crore as on April 1, 2019. The action plan says it is imperative that concerted efforts are made to reverse the trend of increasing arrear demand and to initiate the process of reducing the figure to more manageable levels. The department targets a cash collection of Rs 84,000 crore out of arrear demand.
On litigations, the department has special focus on disposing of cases involving tax demand of less than Rs 2 lakh. There are over 1.94 lakh cases involving tax demand of less than Rs 10 lakh. The action plan of the department noted: "The pendency is still very large, where demand is less than Rs 2 lakh. The special focus for disposal of such cases is required to be maintained as efforts during the earlier year could only reduce the number of old appeals less than Rs 2 lakh to about half whereas the target for the same was 90 per cent."