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

New Delhi: 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 is 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 of 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 done it over a while,” 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 add his share to the growth of the economy, all that has to be culturally percolated to the taxpayers of the potential taxpayers and then things will dramatically change in the department,” Mohapatra said.

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

Quoting the 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 percent 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. We aim to get movement across these gradients,” he said.

”The effective number of good taxpayers 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 of 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).