Pramod Chandra Mody, CBDT chief
Pramod Chandra Mody, the newly appointed chairman of the Central Board of Direct Taxes (CBDT), said he was confident of meeting the direct tax collection target for the current financial year, which has been increased by Rs 50,000 crore. There's been apprehension in different quarters that the revised target of over Rs 12 trillion for 2018-19 cannot be met.
“We are closely working on the measures to bridge the gap in the direct tax collection figures. We have achieved over 65 per cent and I am confident of meeting the target,” Mody told Business Standard.
Mody, a 1982-batch IRS officer, was appointed CBDT chairman after Sushil Chandra was named Election Commissioner last week. Sources said he was instrumental in record revenue achievement as Mumbai principal chief commissioner, income tax, amid several issues such as demonestisation.
As the CBDT chief, Mody said his focus would be on maximising efforts to achieve the revenue target and also on significant widening of the tax base.
The department will further simplify the taxation system, so that compliance does not become a burden. “We want to give good service to genuine taxpayers and at the same time wish to nab delinquent tax payers. We want people to proactively come under the tax net,” Mody said.
The department is working on a mechanism in line with other nations where people are not afraid of filing tax. The chairman is likely to hold a revenue target review meeting with the I-T department officials in mid-March.
Sources said the I-T department had been asked to focus on achieving the stiff revenue target by consistently following up for the collection of the last quarter instalment of advance tax, pending on March 15. The department has been asked to conduct surveys on firms and companies to nab TDS defaulters. The TDS wing has been provided extra manpower at many places.
Further, the department is also going after self-assessment by entities during which advance tax liabilities in previous quarters were understated and it was showed as tax on additional income or windfall gains at the end of the financial year.
The I-T laws allow self-assessment, but only up to a certain extent. Assessees cannot use this mode to adjust their “gains”, which they have not considered while paying advance tax. Seeing it as a regular practice, the tax department has asked taxpayers to explain the mode of computation on the basis of which they arrived at their taxable income.
On the Direct Tax Code draft report, the CBDT chairman said the task force was expected to submit the report on February 28.
The net direct tax collections during the April-January period stood at Rs 7.88 trillion, an increase of 14 per cent, as compared to Rs 6.89 trillion collected during April-January, 2018.
The interim Budget had raised the corporation tax collections by Rs 50,000 crore at Rs 6.71 trillion in the revised estimates, up from Rs 6.21 trillion in the Budget estimate. Personal income tax mop up was retained at Rs 5.29 trillion.
Achieving the revised target is crucial to rein in the Centre’s fiscal deficit target of 3.4 per cent of the country’s gross domestic product (GDP) for FY19 as the goods and services tax (GST) collections are expected to fall short of Rs 1 trillion.
Chandra had raised concerns over the growth in the collection under regular assessment tax (recovery from arrear and current demand), saying it was extremely low at 1.1 per cent, compared to 15.6 per cent growth during the year-ago period.