The Ministry of Finance has confirmed its active pursuit of tax evaders through surveys conducted under Section 133A of the Income-tax Act, 1961. Pankaj Chaudhary, Minister of State in the Ministry of Finance, disclosed that numerous surveys have taken place in the last three years to identify individuals avoiding taxes.
In the Lok Sabha, MP Arun Kumar Sagar asked the Ministry of Finance about the government's efforts to identify tax evaders and enhance taxpayer services in the preceding three years. Chaudhury provided specific details about the surveys conducted in each fiscal year: 1,046 in FY 2021-22, 1,245 in FY 2022-23, and 737 in FY 2023-24.
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Chaudhury also highlighted various initiatives implemented by the government to enhance service delivery for taxpayers, such as the digitalization of services for filing returns, making payments, processing refunds, faceless assessment, and appeals through Aaykar Seva Kendra.
He further added: “Several steps have been taken to improve GST-related service delivery with the digitisation of all services provided to the taxpayers. On customs side, a number of key initiatives have been taken for improving taxpayers services including the extension of benefits of exports through courier mode, IGST refund for export through Dak Niryat Kendras, launch of a new ICEGATE website with AI-based interactive chatbot, introduction of exchange rate automation module and digitization of Customs Bonded Warehouse procedures.”
Growth in Tax Collection Over Four Financial Years The government has shown consistent growth in net direct tax collection from April to October in the last four financial years:
2021-22: Rs 6,55,072.81 crore (75% year-on-year growth) 2022-23: Rs 8,22,169.68 crore (25.5% year-on-year growth) 2023-24: Rs 10,19,017.99 crore (23.9% year-on-year growth) 2024-25: Rs 11,43,863.44 crore (12.2% year-on-year growth)
These figures reflect the government's ongoing efforts to improve tax compliance, combat tax evasion, and enhance service delivery to taxpayers nationwide.
Tax surveys
In August 2024, the Central Board of Direct Taxes (CBDT) launched an extensive investigation into substantial foreign remittances exceeding Rs 6 lakh. The primary objective of this action is to uncover potential instances of tax evasion by detecting inconsistencies in remittance records.
The CBDT's initiative involves a meticulous review of financial transactions to ensure that individuals and businesses accurately report their income and fulfill their tax obligations. By closely scrutinizing these high-value foreign remittances, tax authorities aim to identify discrepancies between declared income and funds transferred abroad.
Specifically, the focus of the tax authorities is on pinpointing individuals and businesses that may have undisclosed income, based on disparities found in Form 15CC data. This form serves as a quarterly disclosure statement submitted by authorized dealers to the income tax department. The examination carried out by the CBDT suggested that some taxpayers are exploiting this provision by breaking down large remittances into smaller amounts below the Rs 7 lakh threshold to avoid the mandatory 20% Tax Collected at Source (TCS).
In the realm of Goods and Services Tax, the Directorate General of GST Intelligence (DGGI) has uncovered tax evasion amounting to Rs 1.2 trillion through the use of fake input tax credit (ITC) since 2020. Special focus is being placed on identifying and apprehending the masterminds behind these syndicates operating nationwide.
A special all-India drive spanning two months was initiated on August 16 to detect suspected fake GSTINs, conduct necessary verifications, and take corrective measures to eliminate these fraudulent billers from the GST ecosystem and protect government revenue.
The Finance Ministry's data revealed that the DGGI identified approximately 59,000 possible counterfeit firms for investigation and additional scrutiny, with 170 individuals implicated in fraudulent activities being captured. This information was disclosed at the national conference of GST enforcement chiefs, leading to the subsequent issuance of a press release by the ministry.