The all-India direct tax collections for fiscal 2016 have fallen short of the revised tax target of Rs7, 52,021 crore by about Rs 18,000 crore, according to data accessed by The Indian Express. The Centre had, in February, lowered its direct tax target for 2015-16 by Rs 45,974 crore to Rs 7,52,021 crore.
“The income tax department has managed to collect about Rs 7,34,000 crore in fiscal 2016, marginally up by 5 percent from a year ago,” said an income tax official. The Indian Express had earlier reported that on March 23, revenue secretary Hasmukh Adhia had sent a terse missive to the Central Board of Direct Taxes (CBDT) chairman Atulesh Jindal seeking an explanation for a likely shortfall in direct tax collections in 2015-16.
In his letter Adhia had pulled up the tax authority for “laxity shown” by field officers in collection of taxes, despite a reduction in revenue target. Adhia had also warned of strict action against tax officials in case of shortfall in collections. Tax officials, however have dismissed the claims of laxity and instead blamed poor infrastructure, lack of amenities and the government’s diktat to provide non-intrusive tax regime for lower than expected tax collections this year.
“The government has asked us to be non-intrusive, but the spirit of the department is enforcement. There has to definitely be taxpayer services but you cannot exclusively make it (I-T department) a service oriented department if you want to achieve those goals (collection targets),” said an I-T official. According to I-T sources, in Mumbai alone about 70 per cent of the positions at the level of tax assistants are lying vacant. Typically tax assistants handle collection and refund of taxes. Apart from this, most of the tax officers do not have access to the internet, said sources. “While we have sent lakhs of notices to individuals asking them to pay up, we don’t have the manpower to process their responses to the notice,” these sources said.
Mumbai contributes to over 39 per cent of the total direct tax collections of the country. According to data for the last 15 years released last week, only 1 per cent of the population pays income tax of which 85 per cent of taxpayers pay less than Rs 1.5 lakh annually — a pointer to the challenges in widening the tax net and raising collections.