Tax authorities seem to be reaping a rich harvest, thanks to improved compliance levels and better economic conditions in 2007-08, which helped widen the tax base.
The income tax department has added close to 16 lakh new individual assessees this fiscal. The department received over 1.41 crore returns till July 31 this year, the last date for filing of income tax returns by individual and non-corporate assessees. This is a 12% rise over the 1.25 crore returns filed with the department till July 2007. In contrast, only 1.23 crore returns were filed till July 2006, implying a mere 1.62% rise in assessees.
?While there has been higher compliance, the higher number of returns is also because of better overall economic conditions in 2007-08 which created a lot of jobs and also pushed up the income levels of people,? an official from the Central Board of Direct Taxes commented. Experts also feel that higher salaries have resulted in a considerable widening of the tax base.
Mahesh Purohit director, Foundation for Public Economics and Policy Research said, ?There has been an upward revision in income levels in most sectors, which has resulted in more people entering the tax bracket.? There is also higher compliance because of simplification of the return filing system and also the facility of online filing, he added.
Electronic filing does seem to have caught public fancy and 12.49 lakh were filed online this year as compared to a mere 1.46 lakh such returns in 2007?a whopping 755.47% increase.
Moreover, while e-filing of tax returns this year was made mandatory for only corporates and large firms, a total of 12.14 lakh or about 97% of the 12.49 lakh e-returns were filed voluntarily by individual assessees, professionals and small businesses.
With the higher number of returns filed, personal income tax collections till July 31, 2008 too have increased substantially by 42.82% to Rs 29,982 crore as against Rs 20,993 crore till the same period last fiscal.