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Why the Income Tax faces uphill task?


The FY 2017-18 was a good one for the Income Tax Department (ITD). As against an average increase of 7% to 8% per year, the number of income tax returns filed in India,
increased by about 20% and the gross income tax collections of India crossed Rs.10 lac crores, for the first time ever. This was despite the fact that India’s GDP growth in FY 2017-
18 was patchy and inconsistent, which is incompatible with such growth in the tax returns filed. This growth in tax returns filed looks to be more due to a onetime after effect of
demonetisation/GST and the tightening of the tax laws, than due to a push up in income tax due to all round economic growth that boosts corporate profits. The CBDT reports that due to
demonetisation 2.15 lac persons who had not filed tax returns, have done so, resulting in an additional income tax collection of Rs.6410 crores. The CBDT is also investigating 80000
cases, where individuals deposited cash during demonetisation, but did not file income tax returns. The question is why is the Income Tax facing such an uphill task ? Mr. Akhilesh Bhargava, Business Editor of HW Business and Finance shares his insights on the matter.

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