The government will arm income-tax officials with details about assets of individuals whose tax payments are pending, a move aimed at meeting the Rs 13,153-crore target for arrears collection this fiscal.
With tax arrears of Rs 2,13,646 crore due as on April 1 this year, the Central Board of Direct Taxes (CBDT) is following an action plan that includes swift action by tax officials and confiscating assets of defaulters, among others.
An effective strategy for collection of arrears and current demand is to empower the assessing officer (the tax official) with relevant information regarding the movable and immovable assets of assessees, a finance ministry official said.
The government has collected tax arrears of Rs 3,548 crore in the first quarter of this year (April-June), the official said, adding the collections were in line with expectations.
The action plan for collection of tax arrears includes quick action by tax officials, ascertaining tax liability for attachment and recovery of assets of individuals whose tax arrears are pending.
The modes used by the assessing officer are to identify the current assets and take necessary action for attachment and recovery for the same, the official added.
The Rs 2,13,646 crore tax arrears pending as on April 1, 2009, include Rs 82,913 crore tax demand raised by the department during 2008-09. Demand arrears are the ones that have been raised by the department but not received from the taxpayer.
Much of this demand, Rs 71,874 crore, is attributable to one groupthe Hassan Ali Group. According to the plan, in cases where the tax demands remain irrecoverable inspite of exercise of the power of recovery conferred under the Income Tax Act, the write off of such arrears should be considered as per instructions laid out on the subject.