Finance Ministry alarmed at low income tax collections; asks taxman to act quick
February, 06th 2016
Alarm bells have rung in the Finance Ministry after net direct tax collections are showing a 35 per cent shortfall with only two months left for closing of the financial year.
Concerned over this, the CBDT, has written to the Income Tax department to pull up its socks and step up the drive for collection of revenue.
In an urgent missive to the top brass of the department in the country, the Board has asked them to give their "highest priority" to get as much as they can on the regular tax front as it is showing a negative growth rate of '-10.44 per cent' as compared to the corresponding growth of 17.25 per cent last year.
While the target for direct taxes collection this fiscal is Rs 7.98 lakh crore, the department has made a net collection of about Rs 5.21 lakh crore by January 31, thereby falling short, at present, by over 35 per cent to reach the target.
In his first general communication to the department, newly appointed Central Board of Direct Taxes Chairman Atulesh Jindal asked the department to tighten their belts after a Revenue Secretary Hasmukh Adhia raised a similar concern in a meeting recently.
"The gross collection grew only by 8.13 per cent. Chairman CBDT needs to ask all Commissioners to achieve their target," Jindal wrote to his Principal Chief Commissioners quoting Adhia.
"In the area of net direct tax collections, the present growth rate is not encouraging if compared with the preceding financial year. The net collections as on January 31, 2016 stand at Rs 5,21,853 crore indicating achievement of 65.40 per cent of budget estimates with a growth rate of 10.87 per cent.
"Looking at the overall minor head-wise growth rate, it is seen that except TDS all other minor heads are having a growth rate which is less than the growth rate of immediately preceding year at this time of the year," he said.
The main cause of concern in this regard, the CBDT boss said, is the "decline in the regular tax collection which is showing a negative growth rate of (-) 10.44 per cent as compared to the corresponding growth of 17.25 per cent last year.
Jindal said while the "scope" of increasing collections under heads like advance tax and self-assessment tax is rather limited, there is "no justification" for a negative growth rate in respect of regular tax.
"I am sure that a large portion of the current demand raised during the current fiscal would have fallen due by now and ready for collection.
"Therefore, our utmost focus for the next two months should be on collection of the collectible demand, both out of current and arrear demand," he said in the communication.