Out of 136 million people in India, just over 8 billion taxpayers, including individuals and businesses, were registered in the 2019-2020 financial year, Parliament informed on Tuesday.
“8,13,22,263 people paid income tax in the country in the tax year (AY) 2020-21 relating to the financial year 2019-20,” said the finance minister Nirmala Sitharaman in a written reply to Rajya Sabha.
The number of taxpayers includes persons who pay income tax and corporation tax and who have either filed a tax return or whose tax has been deducted at source.
Sitharaman said the government has introduced the Non-Filers Monitoring System (NMS) which assimilates and analyzes internal information as well as
transactional data received from third parties to identify individuals who have undertaken high value financial transactions with potential tax liabilities but have not filed their returns. “10 cycles of NMS have been run so far,” she added.
The government has taken several steps to cover the remaining population in the tax net, Sitharaman said.
In addition to the NMS, the finance minister said that the income tax department had launched a “project insight” to strengthen non-intrusive information (relating to
transactions and income) to increase tax compliance.
“Project Insight focuses on three objectives, namely: promoting voluntary compliance and deterring non-compliance, providing assurance that all eligible persons pay appropriate tax, and promoting fair and efficient tax administration,” he said. she declared.
In addition, Sitharaman said that the scope of Tax Deduction or Recovery at Source (TDS/TCS) has been expanded to broaden the tax base by incorporating several new transactions under TDS and TCS. “In order to promote the provision of RTI, a special provision has been inserted into the Income Tax Act 1961 by the Finance Act-2021 to deduct/collect tax at higher rates in the case of some people who failed to deposit their ITRs for both the previous two years and the tax deducted/collected was more than Rs 50,000 in each of the two years.”
In addition to the above measures, the Department seeks to attract more non-filers into the tax net by developing region-specific strategies by authorities on the ground to identify potential non-filers, organizing awareness programs to encourage voluntary compliance and intensive use of the media. for raising awareness, issuing statutory notices to enforce compliance, streamlining tax returns and the filing process to encourage voluntary filing. Emails and SMS reminders are sent to taxpayers to file ITRs and pay their owed taxes, Sitharaman added.
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