Budget 2019: Uncollected income tax arrears could give Modi govt a Rs 1.2 lakh crore boost

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Published: January 23, 2019 8:50:37 PM

CBDT alone accounts for collecting over 90% of undisputed tax arrears due to the government, a sum that is 150% of the disinvestment target set by finance minister Arun Jaitley for the entire financial year in the last budget.

Collection of undisputed income tax arrears will give Modi government a Rs. 1.2 lakh crore boost.

Budget 2019: The government has issued a stern warning to tax evaders, saying those who fail to file income tax returns within three weeks will face stringent action. However, the government’s record of collecting even undisputed tax arrears doesn’t inspire much confidence.

The government’s tax collection machinery is sitting on undisputed tax arrears of over Rs 1.33 lakh crore due for one year or more, an amount almost equal to the budgeted expenditure for three important departments – health and family welfare (Rs 52,800 crore), school education and literacy (Rs. 50,000 crore) and department of higher education (Rs 35,010 crore) in the last budget.

Mere collection of undisputed tax arrears that were due at the end of reporting year 2016-17 will give the government nearly Rs. 1.34 lakh crore that is 95% of the government’s entire food subsidy bill as per the revised estimate for FY 2017-18.

The central board of direct taxes (CBDT) which issued the warning against tax evaders alone accounts for more than 1.2 lakh crore or 90% of undisputed tax arrears due to the government. This amount alone is Rs. 40,000 crore more or 150% of the entire disinvestment target of Rs. 80,000 crore set by finance minister Arun Jaitley for FY 2018-19, which the government is finding extremely difficult to meet.

Opposition leaders have routinely criticised the NDA government for failing to collect huge sums of undisputed tax arrears despite having a large collection machinery that apparently uses sophisticated tools and technologies like e-filing and analytics as is evident from the notice issued by the CBDT to non-filers on Tuesday.

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