Business & Finance

Income Tax Department tightens its noose

With the government struggling to meet its revised fiscal deficit target of 3.4% of GDP for the current year, and add to this, lower than expected GST collections and a lackluster disinvestment program not helping out; there seems to be just one avenue to close the fiscal gap – Income Tax Collections.

The Income Tax Department is said to be leaving no stone unturned in its attempt to please its superiors in the Finance Ministry in their attempt to bridge the fiscal deficit target.

The collection target for the taxman for the full year is ₹ 12 lakh crore, however, collections till the third week of Feb was a little less than ₹ 8 lakh crore, leaving the taxman a herculean task if they are to meet the target.

And judging by the modus operandi of the IT Department in the past, experts believe this could intensify its recovery drive and one cannot put recovery by coercive means and delaying of tax refunds beyond them.

Already, reports of IT officials taking aggressive stands in not releasing refunds determined as payable, or adjusting them against tax demands that are disputed, are beginning to surface. Add to this tax officials seem to be under pressure and are working weekends and even on public holidays and have been active in issuing summons or conducting surveys, especially related to TDS matters.

What is interesting to note is that there has been a change at the top – P.C. Mody has taken charge of the CBDT, which is the apex body for direct taxation in the country, from outgoing chairman Sushil Chandra. Mody’s style of functioning is said to be very different from his outgoing contemporary.

He has reportedly told senior IT official that “immediate priority of the tax office would be maximising revenue, but it must be done without any harassment on the part of officers”.

An IT official was quoted saying “Collections are growing by about 12.5% against an asking rate of 19.5%…..it’s a challenge”.

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