While the government’s direct tax collection grew 50% from R4.93 lakh crore in FY12 to R7.42 lakh crore in FY16, the number of assesses on record increased 77% from 3.65 crore to 6.44 crore during the same period, indicating that the government’s measure to collect tax at source is working, and authorities are making steady progress in increasing the taxpayer base.
The latest CAG report on direct taxes shows that the share of direct taxes in gross tax revenue has gone down from 55.9% in FY15 to 51% in FY16. Actual returns filed by non-corporate assesses increased from 3.57 crore in FY12 to 3.98 crore in FY16 and that of corporate moved up from 5.9 lakh to 6.9 lakh during the same period.
In direct tax, corporation tax increased from R3.22 lakh crore in FY12 to R4.53 lakh crore in FY16, and income tax grew from R1.64 lakh crore to R2.8 lakh crore. Total direct tax receipts of the Center in FY16 was 5.5% of the GDP. Out of total 7.05 lakh scrutiny assessment cases, the income tax department had disposed off 3.39 lakh cases, or 48% in FY16.What is worrying is that the report shows the arrears of demand have more than doubled to R8.24 lakh crore in FY16 from R4 lakh crore in FY12. The income tax department has indicated that 97% of uncollected demand is difficult to recover in FY16.
As a result, appeals pending with CIT(A) increased from 2.3 lakh in FY12 to 2.59 lakh in FY16, and the amount locked up in these cases with CIT(A) was R5.16 lakh crore in FY16.
The amount locked up at higher levels (ITAT/High Courts/ Supreme Court) increased from R1.9 lakh crore (77,448 cases) in FY15 to R3 lakh crore (70,371 cases) in FY16.