Dwindling tax collections: FM asks assessees to file returns

Chidambaram claims only half the 2.8 million deductees file tax returns

Ahead of the Budget, Finance Minister P Chidambaram today appealed to all assesses to file their returns, amid fears of a shortfall in budgeted tax collections. He also said the tax department was moving towards information technology to improve the tax payment and tax refund mechanism.

"We have around 2.8 million deductees, of which only 1.4 million people have filed returns. The other 14 lakh do not file return. We do not know whether they are filing TDS,” the finance minister reporters after inaugurating the Centralised Processing Cell (CPC) of the Income Tax department at Vaishali, Ghaziabad.

The CPC would process all Tax Deducted at Source (TDS) applications and help ease the compliance procedure for taxpayers.

Chidambaram said with the use of technology the tax department would have to get each one of the 2.8 million tax deductees to file returns so that the tax amount can be credited to the government and refund to the deductee.

He added a technology-driven tax administration would help the tax deductor, the tax collector and the payee link to each other without being manually involved in the process.  

The finance ministry has set a target of Rs 5,70,251 crore for collection of direct taxes this year—a growth of 15 per cent growth over previous year’s collections. Gross direct tax stood at over Rs 4.55 lakh crore in April-January this year. Fearing a shortfall, the government has been sending warnings and notice to alleged tax evaders.