I-T dept sends second lot of 35,000 letters

The Income Tax (I-T) Department has sent letters to another 35,000 high spenders who haven’t filed returns. Last week, too, it had sent letters to as many.

These persons were part of around 1.2 million non-filers identified as a result of a data matching exercise. With this latest batch, the department has issued letters in 175,000 high priority cases.

Pursuant to the letters, taxes of about Rs 600 crore have been paid as self-assessment tax and advance tax by the target segment in the past three months, the finance ministry has said.

The department has set up a compliance management cell to ensure follow-up action and track the filing of returns and tax payment of the target segment. Letters are the first stage of reminding tax payers that they have not filed returns. The next step are notices.

Tax assessees off the radar are identified from third-party information, called Annual Information Returns, on spending by these individuals. AIRs are basically information given by banks and others to the I-T department on spending above a threshold by any individual.

The department matches this spending with the income disclosed, to check whether the true income was disclosed.

Besides, information from the Cash Transaction Reports of the Financial Intelligence Unit is being used (this is the central agency for receiving, processing, analysing and disseminating information on suspect financial transactions to enforcement agencies). This data analysis has identified a target segment of 12,19,832 non-filers, linked to 47 million information records. Rule-based algorithms were used to identify high-priority cases for follow-up and monitoring.

The government’s aim is to raise I-T collections by 20 per cent to Rs 2.48 lakh crore in 2013-14 from the Rs 2.06 lakh crore in the revised estimate for 2012-13.

Finance Minister P Chidambaram is to review revenue collection in his meeting with I-T chief commissioners and directors-general tomorrow. The agenda of the two-day meeting will be to identify steps to augment revenue, tax administration reforms, strengthening of the Tax Deducted at Source machinery, widening and deepening of the tax base, improvement of taxpayer services and related issues.

Last week, the Cabinet had approved a proposal to create another 20,751 hands for the revenue arms, aimed to help it raise tax collections by at least Rs 25,000 crore a year.