The income tax (I-T) department will closely monitor your company’s growth this year. This is one of the instructions given by the finance ministry to tax authorities to ensure better tax compliance.
Tax officials have been asked to tighten things to achieve the new target, which is going to be a difficult task with the new reduced tax rates implemented from this financial year (2010-2011). In the current financial year, Mumbai has been given a collection target of Rs 1.5 lakh crore which is Rs 10,000 crore more than last year. Similarly, the all India target is set at Rs 4.3 lakh crore, up by Rs 30,000 crore over last year.
The finance ministry has directed officials to be vigilant as the lowered tax rates and introduction of some new tax saving schemes would cause loss of Rs 26,000 crore to the government on all India level this financial year. Of this, Mumbai is to lose around Rs 9,000 crore in tax.
I-T officials said with the economy doing well now, companies will witness growth in their respective businesses. “The finance ministry has asked us to monitor the sectors which will do well, for better tax compliance,” a senior I-T official in Mumbai said.
Officials said they need to keep a watch as Mumbai and the country had failed to achieve the targets in the last financial year (2009-2010). As against the target of Rs 1.4 lakh crore, the collection in Mumbai was around Rs 1.28 lakh crore. For the country, the collection was Rs 3.8 lakh crore — Rs 20,000 crore less than the target.
Shishir Jha, spokesperson for Central Board of Direct Taxes, the apex body of I-T department, told Hindustan Times that in the I-T chief commissioners conference held earlier this month, ways and means to improve the tax collection efforts were discussed.
“We will also have to recover the Rs 26,000 crore loss which is due to lowered tax rates and introduction of tax saving measures,” he said.
Jha said that besides keeping watch on the sectors doing well, tax deducted at source compliance by companies would also be monitored. “The department has also been asked to do tax audits properly and raise demands wherever required,” he said.