NEW DELHI: Fearing increasing expenditure and widening fiscal deficit, the Central government is banking on aggressive tax collection and recovery, and is targeting an additional Rs 15,000 crore revenue from recoveries of pending tax dues. “The tax collection in the first quarter is better, it’s only going to improve. Apart from the initial target set by the revenue department, we aim to add at least Rs15,000-20,000 crore through strict compliance and recoveries from defaulters,” a revenue department official told The Sunday Standard.
According to the Central Board of Direct Taxes, Income-Tax (I-T) collection stood at a record Rs 10.03 trillion during FY18. The I-T department added 10.6 million new return filers during the fiscal. However, given that this is the last year of the current government in office, populist measures like reducing GST on many items and MSP hike, along with weaker global cues, may take a toll on the economy. Analysts worry about the possibility of a higher-than-budgeted expenditure in the election year.
Earlier this week, India Ratings and Research had revised India’s GDP forecast from 7.4 per cent to 7.2 per cent. A UBS report has warned that there is a risk of the Central government breaching its fiscal deficit target of 3.3 per cent of the GDP by at least 20 bps in FY19, unless it adjusts expenditure or if the non-GST revenue collection turns higher-than-budgeted.
The government is planning to achieve the higher targets by stronger recovery and focussed crackdown on tax defaulters.“The government has given additional targets both for personal income tax and corporate tax. An additional revenue of Rs 10,000 crore is targeted from corporate income tax alone and the department is aggressively sending notices to defaulters. In the coming months, a special team will be formed for regions like Mumbai, Delhi NCR, Andhra Pradesh and Telangana, where we expect better recovery,” the official said, adding that increased penalty may ensure better compliance.
As per the new rules, a small taxpayer whose gross total income does not exceed Rs 5 lakh will be liable to pay a maximum penalty of Rs 1,000. If an individual has missed the Jule 31 deadline, a penalty of Rs 5,000 will be levied, if the ITR is furnished before December 31. A late fee of Rs 10,000 will be levied after that.