Encouraged by the earlier results the Finance Ministry on Monday said it will continue to send letters to assessees who do not file income tax return.
“We have been sending letters. We are getting results. The number of returns filed has been showing an increase. We intend to continue with the efforts,” Revenue Secretary Sumit Bose said at an Assocham event.
The Income Tax Department has already issued letters to over one lakh non-filers for failure to file IT returns in the past couple of months.
The letters contain summary of information about financial transactions along with customised response sheet with a view to know why the person has not filed the income tax return.
As per the department, there are over 12 lakh Permanent Account Number (PAN) holders who had not filed income tax returns. After identifying the defaulters, the department has already sent letters to over one lakh such assessees.
Bose further said the Tax department’s effort is to widen the tax base in order to augment the revenue. “As the tax base widens, hopefully in near future, tax rates could fall,” he said.
Although the Budget 2013-14 has kept the tax rates unchanged, it has proposed a 10 per cent surcharge on those whose annual income exceeds Rs. one crore.
The measure is likely to impact about 42,800 assessees and contribute about one per cent additional revenue to the government.
The revenue department is tapping all sources to achieve the Rs 5.65 lakh crore collection target under direct taxes category for this fiscal ending March 31.
The Secretary also admitted that 19 per cent growth in tax collection projected for next fiscal is a “big challenge.”
On concerns related to arrest provision in case of those defaulters of indirect taxes, Bose assured the industry that the norms would not be used indiscriminately.
“It is not our intention to use any such provisions indiscriminately,” he said adding the measure is aimed at those who get away without paying taxes.
CBEC Chairperson Praveen Mahajan, who was also present at the event, said there “is no likelihood of unwarranted harassment” due to the arrest provision.
As per the Finance Bill 2013 proposals, failure to pay excise duty and service tax of over Rs. 50 lakh could lead to arrest of defaulters.