The Income Tax department is now looking into taxpayers (who are not paying tax) in tier II and tier III cities with an earning of Rs. 4 lakhs per annum. The move follows the lead in the ambitious drive to meet the target of 1 crore assesses this year.
An official from the Central Board of Direct Taxes (CBDT) said, We want that at least people who are earning taxable income, let them start filing returns. Because, even small payment of tax by a large number of people is a favourable thing and this currently constitutes our tax gap. As far as our understanding goes, after the studies which we got conducted, people who are not filing returns are people who are earning income of about Rs 4 lakh (per year). They are the ones who are missing from over records as filers... Then we have people who are filing returns but they are understating their income. Our approach for them was different but now what we are talking about those small taxpayers in the tier-II and tier-III cities who have small income but they have taxable income. There are about 18-20 per cent people in this bracket who are missing... We got a feedback that people living in posh areas, where the property prices are certainly for a category which should be on the tax net, they are not filing returns. We are asking RWAs that please tell your residents that you have a liability (to pay income tax), so you should pay taxes and that it is so easy to pay taxes.
Speaking at a press conference, the official said that the government will be able to reduce overall taxes if small taxpayers paid their dues. So, if these assessees, who are in large numbers, start paying, may be their taxes are small but even that small amount bolsters the revenue. So, once you get better tax compliance from a larger population you have the leeway to reduce the taxes. The Finance Minister has also said that... Someone who is not paying tax is actually increasing the burden for someone who is paying the tax and people don`t realise that. That is why we have begun the new project of bringing more and more eligible people into the tax net... We will not hunt down (potential taxpayers)...we are not doing door-to-door survey. We are not sending our inspectors to houses etc. We are trying to do in a non-intrusive way to let the taxpayer know that the department knows you have income. We have information about you and you please file your taxes.