The Central Board of Direct Taxes (CBDT) has set a target of adding 1.25 Cr New Income Tax Filers by the end of the 2018-19 Financial year (FY2018-19). And we managed to get 75 Lakh New Tax Filers into the Income Tax Net so far. The CBDT which frames the policies for the Income Tax Department hopes to achieve this target by the end of FY2018-19.
How and Who of IT :
The main reasons for this progress has been attributed to the number of policies and enforcement measures taken to check tax evasion. Tax evasion is escaping from paying ones taxes. Last year’s number of new tax files was 1.06 Cr, this year they have raised it to 1.25 Cr. The years mentioned here are the financial years. A financial year starts from 1 st April of this year to 31 st March of next year. So this is the FY2018-19 or FY19.
A New IT Filer is a person who was not included in the IT base at the beginning of a financial year but files for Income Tax Returns at the end of it. They must have joined during the ongoing financial year. An Important point to be noted: An IT Return Filer may not always be a Tax Payer. A Tax Evader or escapee can also file for illegitimate returns or benefits. However, once a person is in the Income Tax Database,their incomes are monitored. They can not be unknown.
Economical Growth :
Our Indian Economy is seen to have been growing up at a fast pace. This growth widens up the scope for many such developments. Due to the policies and measures formed and taken, both the organised and the in-organised sector activities have been increasing. The Inclusiveness of the small enterprises into the vast Indian Economical System resulted in fruitful outcomes.
The North West region i.e. Haryana, Punjab, Himachal Pradesh and Jammu & Kashmir together topped in adding the most number of new files. Followed by Pune region and Tamilnadu region. Others were:
- 4th- Andhra Pradesh and Telangana regions
- 5th- Gujarat
- 6th- Karnataka and Goa regions
Effects of GST and Demonetisation :
In the first 6 months of GST, the number of income tax payers increased by 50%. All of them voluntarily joined the system. In the following consecutive years, there was a decline and a slow increase in their numbers. Earlier to the existence of GST, our economy had only a few sources of Indirect Taxes. After the implementation of GST, more than 60% of Centre’s Indirect Tax Revenue comes from GST collection.
On the other hand, Demonetisation has increased the number of Tax Payers. But, it did not effect the collection of Direct Taxes. In the following years after demonetisation, even the number of tax payers came down. A Research Study paper by the Centre of Development Studies stated that “Demonetisation took out only a 12% of the tax evaded money in India. This happened so because, comparitively there is only a small percentage of tax evasion is done in Cash”. (Tax evaded money is popularly known as ‘Black Money’)
However, the effects of GST and Demonetisation did have a positive impact on our economy. They are a great combination to monitor and regulate, present and future tax evasions in the country. The progress seen might be slow but it is too soon to decide on their total impact on our Growth and Development.