The Mumbai income tax department has detected that self assessment tax worth Rs 1,000 crore has not been paid since September 2008.
Self assessment tax is the amount payable by the taxpayers own admission in the return filed by him. Despite this information, many taxpayers have not paid the tax till now. Self assessment return is filed by the tax payer if he expects his tax outgo to be more than the advance tax paid by him.
The self assessment tax payable by individuals and companies this fiscal year is estimated at Rs 1,400 crore. Out of this, the department has received only Rs 400 crore so far. The departments software system detected the discrepancy in the amount reported in the returns and the tax actually paid.
I-T department chief commissioner (Mumbai) PC Chottaray said: We know through our computer system, who the defaulters are and I want them to know that such defaults would attract interest and penalty and even prosecution.
Discreet enquiries made by the department revealed that many of them did not have the resources to pay the tax. Hence the default.
Mr Chottaray said tax payers are defaulting on payment of tax deducted at source too. In many cases, companies have not paid TDS despite deducting TDS from their clients incomes. The tax they deducted is government money and therefore, there cannot be an excuse for not paying TDS.
Mumbai, which accounts for 35-40% of the total direct tax, is expected to collect Rs 1,50,000 crore this fiscal year. Out of this, collection by way of TDS was projected to be Rs 47,000 crore.
Mr Chhotaray said his department has been carrying out raids and surveys to send out the message that it would not be in the interest of the tax payer to conceal income. My advice to the tax payer is to pay tax and live in peace.
The Central Board of Direct Taxes, the apex body on tax matters, is expected to collect Rs 3,95,000 crore this fiscal year by way of direct taxes. The first two months of the fiscal year witnessed a smooth 71% increase in collection but the trend started reversing from the third quarter that saw the slowdown starting in the economy.
With the slowdown, corporates and individuals started reporting lower margins and therefore lower tax outgo, making it difficult for the tax man to meet his projected collection.