The Income Tax Department has been diligently addressing the challenge of outstanding dues, with a significant increase in collection observed over the years. Until the financial year 2021-22, the average collection was around eight percent of the annual outstanding. However, this figure rose to 10.78 percent in 2022-23, marking notable progress. In the current financial year, the collection has surged to approximately 17 percent, indicating a substantial improvement in tax recovery efforts.
As of January 31, 2023, pending tax arrears exceeded Rs 21.94 trillion, up from Rs 15 trillion in April 2021, underscoring the importance of addressing this issue. Efforts are underway to enhance the accuracy of the database, particularly in cases where taxes were paid but not reflected in the system. These initiatives align with the department’s commitment to improving taxpayer services and upholding the integrity of the taxation regime.
In an interview with PTI prior to the Interim Budget 2024-25, Revenue Secretary Sanjay Malhotra highlighted the government’s focus on continuity in the taxation regime. He acknowledged the significant buoyancy in personal income tax, attributing it to the benefits extended to taxpayers in recent years.
Malhotra reiterated the government’s dedication to enhancing taxpayer services through rationalization, simplification, and trust-based taxation. Addressing concerns regarding the non-extension of the concessional tax regime for corporates beyond March 31, 2024, he clarified that companies were provided sufficient time to avail of the benefits. Moreover, he emphasized that the existing taxation rate of 22 percent for corporates is reasonable given the size of the economy.
