Lok Sabha Question No. 1497 (UNSTARRED), answered on 2016-03-04
Subject: Tax Refunds
Ministry: FINANCE
Asked by: KRUPAL BALAJI TUMANE

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVNEUE

## LOK SABHA UNSTARRED QUESTION NO +1497 TO BE ANSWERED ON FRIDAY, THE 4 TH  MARCH 2016 14 TH  PHALGUNA 1937 (SAKA)

## TAX REFUNDS

- +1497. SHRI KRUPAL BALAJI TUMANE: Will the Minister of FINANCE be pleased to state: (a) the total amount of tax to be refunded as on date along with the main reasons therefor; (b) the manner in which advance tax payment is administered or managed; (c) whether the Government proposes to make any improvement in tax collection management; (d) whether any scheme is being considered to encourage people to disclose their unaccounted money so that this fund may be used for development projects or other purposes; and (e)  if so, the details thereof and achievements of the same till date?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI JAYANT SINHA)

- ( a) As on 27.02.2016, claims of refund amounting to Rs. 1,50,529 crore are pending in the income-tax returns filed by the taxpayers for various assessment years. Processing of incometax returns, including returns with refund claims, is continuously taking place.  The major part of the pending refunds pertains to current year i.e. Assessment Year 2015-16 where returns have been filed in last few months.

The settlement of a claim of refund may get delayed for several reasons including:

- (i) Statutorily refunds in cases selected for scrutiny under section 143(3) of the Income Tax Act 1961 are issued only after the completion of the scrutiny proceedings.
- (ii) In cases where intimations have been issued to taxpayers for adjustment of arrears of earlier  years, refunds can be issued only after the taxpayer has replied to the intimation/ notice of the Department and such replies are awaited in large number of cases.
- (iii) Incorrect details of bank account furnished by taxpayers, also delays the refunds.
- (iv) Incorrect address or change of address of taxpayers.
- (v) Cases  where  taxpayer  has  not  submitted  ITR-verification  (ITR-V)  form  to  the Department after e-filing the return.
- (vi) Cases where defective notice has been issued to taxpayer under section 139 (9) of the IT Act 1961.
- (vii) Verifications on account of all the above reasons in delays issue of refunds also.

(b) Advance tax is a voluntary payment of tax by the taxpayer based on his own estimates of  his  total  tax  liability  during  the  year.  The  due  dates  for  payment  of  the  instalments  of advance tax  and  the  proportion  of  the  total  tax  to  be  paid  in  those  instalments  have  been specified in section 211 of the Income-tax Act, 1961.  Though it is a voluntary payment, the trends  of  advance  tax  payments  by  different  sectors  of  the  industry  and  those  by  the  top taxpayers  are  regularly  monitored  and  appropriate  interventions  are  made  to  maintain  the growth of advance tax collections.

(c) The Income Tax Department formulates a Central Action Plan every year for boosting the  revenue  collections.    Each  region  is  allocated  target  for  tax  collection.  Each  assessing officer is required to monitor the advance tax payments by top advance tax payers within its jurisdiction for follow up action, if and when required.  Strategy has been devised to focus on quality scrutiny assessments and collection of the demand raised thereafter. Special attention is given to recovery of arrear demand.   Emphasis has been given to enhance tax collection by way  of  deduction/collection  of  tax  at  source  including  by  ensuring  compliance  to  TDS provisions  by  DDOs  through  awareness  campaigns,  seminars,  etc.  Also  action  by  way  of searches and surveys is being done utilized to detect tax evasion in appropriate cases and also to create deterrence against tax evasion.

In  the  past  several  years,  massive  computerization  of  various  functions  of  the Department has reduced compliance burden and grievances.  It has also led to creation of a huge data bank of financial transactions which is being increasingly relied upon to identify non-filers, stop-filers, instances of under reporting of income and non-disclosure of transaction in the process making of tax collection management more efficient, effective and tax-payer friendly too.

(d)  &  (e)  In  the  Budget  2016,  the  Government  has  proposed a limited period  Compliance Window for domestic taxpayers to declare undisclosed income or income represented in the form of any asset and clear up their past tax transgressions by paying tax at 30%, a surcharge at 7.5% and penalty at 7.5%, which comes to a total of 45% of the undisclosed income. There will  be  no  scrutiny  or  enquiry  regarding  income  declared  in  these  declarations  under  the Income  Tax  Act  or  the  Wealth  Tax  Act  and  the  declarants  will  have  immunity  from prosecution.

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