Lok Sabha Question No. 1086 (UNSTARRED), answered on 2016-07-22
Subject: Widening of IT Net
Ministry: FINANCE
Asked by: PONGULETI SRINIVASA REDDY, C. N. JAYADEVAN, JOSE K. MANI, SAUGATA ROY, JAYSHREEBEN  PATEL

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA

## UNSTARRED QUESTION NO.1086

TO BE ANSWERED ON FRIDAY, THE 22 nd  July 2016 31 ASHADHA 1938 (SAKA)

## WIDENING OF IT NET

## 1086.   SHRI PONGULETI SRINIVASA REDDY:

SHRI C. N. JAYADEVAN:

SHRI JOSE K. MANI:

PROF. SAUGATA ROY:

SHRIMATI JAYSHREEBEN PATEL:

Will the Minister of FINANCE be pleased to state:

- (a) the number of tax payers and their proportion to the total population of the country;
- (b) whether the Income Tax Department has been directed to widen the tax base and take suitable action against tax evaders and defaulters; and
- (c) if so, the details thereof and the action taken in this regard?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SANTOSH KUMAR GANGWAR)

- (a) As  per  the  Census-2011,  the  total  population  of  India  is  1,21,08,54,977.  The  number  of taxpayers of income tax for the Financial Year 2015-16 is 5,24,38,971 which works out to 4.33% of the total population of India.
- (b) While  widening  of  tax  base  and  action  against  tax  evasion  are  already  core  operational functions  of  the  Income  Tax  Department,  the  Hon'ble  Prime  Minister  had  also  during  the Conference of Tax Administrators held in June, 2016 asked the Income Tax Department to widen the tax base and take suitable action against the non-filers and tax evaders.

(c) Though no specific target has been prescribed in this regard, the Government has adopted the following strategies for widening of tax base:-

- (i) The  Income  Tax  Department  has  implemented  the  Non-Filer  Monitoring  System  (NMS) which  analyses  and  assimilates  all  in-house  information  as  well  as  transactional  data received from third-parties, including Annual Information Return (AIR), Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) statements, Central Information Bureau (CIB) data etc. to identify such persons/entities who have undertaken high value financial transactions but have not filed return. About 1.36 crore non-filers with potential tax liability have  been  identified  under  NMS  and  more  than  52  Lakh  returns  have  been  filed  by  the target segment.
- (ii) The Government has also taken several other steps for broadening of tax base in India. The mechanisms for collection and verification  of  financial  information  have  been  broadened and strengthened. These include collection of data in respect of various types of high-value transactions from  banks  and  financial institutions and high-value expenditure  from commercial establishments in form of Statement of Financial Transaction (SFT). Besides, various  legislative  measures  have  been  taken  to  increase  the  tax  base.  These  include expansion of scope of TDS and TCS by bringing more and more taxable transactions within their  ambit.    Moreover,  quoting  of  Permanent  Account  Number  (PAN)  has  been  made mandatory for all transactions above Rs. 2 lakh and for specified transactions in respect of property, shares, bonds, insurance, foreign travel, demat account, etc.

As  regards  action  against  tax  evaders  and  defaulters,  the  Government  has  taken  several policy-level  initiatives  as  well  as  enforcement  actions  in  recent  past,  including  the  following measures:

- (i) Constitution of the Special Investigation Team (SIT) on Black Money under Chairmanship and Vice-Chairmanship of former Judges of Hon'ble Supreme Court.
- (ii) Enactment  of  a  comprehensive  law  -  The  Black  Money  (Undisclosed  Foreign  Income  and Assets)  and  Imposition  of  Tax  Act,  2015  which  has  come  into  force  w.e.f.  01.07.2015  to specifically and more effectively deal with the issue of black money stashed away abroad.
- (iii) Introduction of the Benami Transactions (Prohibition) Amendment Bill, 2015 to amend the Benami Transactions (Prohibition) Act, 1988 with a view to, inter alia, enable confiscation of benami property and provide for prosecution.
- (iv) Proactively  furthering  global  efforts  to  combat  tax  evasion/black  money  by  joining  the Multilateral Competent Authority Agreement in respect of Automatic Exchange of Information  and  having  information  sharing  arrangement  with  USA  under  its  Foreign Account Tax Compliance Act (FATCA).
- (v) Initiation of the information technology based 'Project Insight' by the  Income  Tax Department for strengthening the non-intrusive  information  driven  approach  for  improving tax compliance and effective utilization of available information.

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