Working to improve tax literacy for widening taxpayer net: CBDT chairman

Income Tax department is working to improve abysmally poor tax literacy in India so that the number of tax paying people, entities can be increased leading to enhanced collections, J B Mohapatra said


CBDT chairman | Income Tax department

The Income Tax department is working to improve the “abysmally poor” tax literacy in the country so that the number of tax paying people and entities can be increased leading to enhanced collections, CBDT Chairman J B Mohapatra has said.

He said the direct tax establishment — the government authority that primarily collects personal income tax and corporation tax among others — will do “everything possible” to see that the effective number of taxpayers who can add to the revenue kitty are enhanced.

“There are a few things to be done here. One is expanding the tax literacy which is abysmally poor across the country,” he told PTI.

“Banking literacy has gathered steam and people know what is a bank and how to open an account. Banks have invested in expanding the banking knowledge of the people. That thing has not happened in (income) tax and that is on top of our mind,” he said.

The CBDT chief was asked about the steps being taken by the taxman to widen and deepen the tax base in the country given that the department recorded its highest-ever direct tax collections at over Rs 13.63 lakh crore (as on March 16) during the current financial year.

He said the I-T department recently, on the intervention of Union Finance minister Nirmala Sitharaman, concluded a fortnightly ‘mulaqat’ event in the far off and remote areas of Jammu and Kashmir where the department met locals and told them about the department and its work.

“This kind of interaction with people in tier-II and tier-III cities, in ‘panchayats’ and blocks has to happen over a sustained period. It can’t happen in a year or so but we have do it over a period of time,” Mohapatra said.

“People’s knowledge about the tax department, what it stands for, how does a taxpayer and a potential taxpayer help in national development and subsequently the taxpayer adds his share to the growth of the economy, all that has to be culturally percolated to the taxpayers or the potential taxpayers and then things will dramatically change in the department,” Mohapatra said.

He added that the department will undertake outreach programmes and take help of various modes of mass communication and multimedia to take the work and idea of the department among the people.

Quoting latest data, the CBDT chief said income tax return (ITR) filing numbers are roughly 7 lakh crore of which about 4 lakh crore are from the TDS (tax deducted at source) category.

The taxpayers’ profile in India is that more than 92 per cent filers are in the 0-Rs 10 lakh gross total income bracket, beyond Rs 10 lakh-Rs 50 lakh is 6-7 percent and from Rs 50 lakh to Rs 5 crore is 0.6-0.7 percent and beyond Rs 5 crore of gross total income it is around 28,000-31,000 filers.

“So, our top is very narrow, very small and the base is quite large. Our aim is to get movement across these gradients,” he said.

“The effective number of good tax payers who can add to the tax kitty is our aim and for that we will do everything possible,” he added.

Sitharaman had recently informed the Parliament that India had 8.22 crore taxpayers, which included individuals and corporates.

“Total number of taxpayers for AY (assessment year) 2020-21 is 8,22,83,407. The projected total population of the country as on March 1, 2021 …. was 136.30 crore,” she said.

The number of taxpayers includes people who pay income tax and corporate tax and who have either filed an ITR or in whose case tax has been deducted at source (TDS).

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor