The trust-based taxation system introduced by the government has led to a rise in mop-up and caused a spike in the number of return filings, finance minister Nirmala Sitharaman said on Sunday.
Direct tax collections jumped 49% in FY22 from a year before to hit a record Rs 14.09 trillion, supported by robust collections from the individual and corporation tax segments. The finance ministry has budgetted a marginal year-on-year rise in direct tax collection for FY23 at Rs 14.20 trillion, which is all set to be breached, as the mop-up remains healthy.
On the occasion of the 163rd Income-Tax Day, the finance minister commended the tax department for achieving the record collection in FY22 and exuded confidence that the momentum would be maintained in the current fiscal as well.
Sitharaman highlighted that the government handled legacy issues with pragmatism and removed structural bottlenecks relating to direct taxes.
“The taxpayers on their part have vindicated this trust-based approach as evident from the trend of improved tax collections and increase in the number of income tax returns filed,” the minister said.
The income tax department has been using technology effectively to further improve taxpayer services, minimise discretion in decision-making and raise transparency, fairness and speed of departmental processes. Thus, it has effectively reoriented itself as a taxpayer-centric organisation, the minister added.
At the same time, Sitharaman called on the department to prepare itself for the next 25 years.
“As we collectively prepare ourselves to propel our nation into the next stage of growth and development in the Amrit Kaal, we hope that the Income Tax Department will re-dedicate itself towards taking forward the progressive policies of the government and use technology to further enhance quality of taxpayer services,” she said.
Minister of state for finance Pankaj Chaudhary said the I-T department’s responsibility is not restricted to efficient tax administration alone; rather, it also extends to appreciating the honest taxpayers and providing better facilitation services.
Speaking on the occasion, revenue secretary Tarun Bajaj complimented the department for embracing positive changes and committing itself to delivering time-bound services to taxpayers.
Various taxpayer outreach programmes organised by the department will help create an atmosphere of mutual trust and respect between the taxpayers and the department, Bajaj said.