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Ravi Agrawal, Chairman of the Central Board of Direct Taxes, expressed confidence in meeting the ₹25 lakh crore tax collection target, anticipating support from advance tax installments. He stated that Income Tax Return forms and related rules will be ready by January, crucial for the upcoming Income Tax Bill 2025 and the Union Budget. Agrawal also highlighted increased appeal settlements and explained that refund delays are due to caution against fraudulent claims, with larger refunds undergoing deeper scrutiny to strengthen compliance.
Chairman Ravi Agrawal is optimistic about achieving the ₹25 lakh crore direct tax collection goal for the fiscal year, believing that the remaining advance tax payments will significantly boost collections.
The Income Tax Return (ITR) forms and associated rules are slated for release by January. These are considered fundamental for the proposed Income Tax Bill 2025 and are part of the preparations for the Union Budget in February.
The CBDT has made substantial progress in reducing appeal pendency, settling nearly 40% more appeals compared to the previous year. This effort aims to lower litigation, a long-standing demand from industry stakeholders.
Agrawal addressed concerns about refund delays, attributing them to increased vigilance against fraudulent claims. While smaller refunds are processed promptly, larger claims are subjected to more thorough scrutiny to ensure compliance and prevent misuse of the system, especially in anticipation of the new tax framework.
Taxpayers are urged to reconcile and correct their Tax Deducted at Source (TDS) claims. Agrawal stressed that deadlines for revised TDS filings have been tightened over the years to promote discipline, and taxpayers still have an opportunity to rectify their claims.
Impact
This news has a moderate impact (6/10) on the Indian stock market. Improved tax collections and efficient tax administration can contribute to fiscal stability and investor confidence. Stricter scrutiny on refunds might temporarily affect cash flow for some businesses but aims for long-term compliance. Preparations for the Union Budget are always closely watched for policy direction.
Difficult Terms Explained:
- Central Board of Direct Taxes (CBDT): The apex direct tax administration body in India, responsible for framing policies and managing direct tax collection.
- Advance Tax: Tax paid in installments throughout the financial year, rather than a lump sum at the end, for income that is expected to exceed a certain threshold.
- Income Tax Returns (ITR): Forms filed by taxpayers annually to declare income, calculate tax liability, and claim refunds or pay taxes.
- Union Budget: The annual financial statement presented by the government, outlining its revenue and expenditure plans for the upcoming fiscal year.
- Appeal Pendency: The backlog of unresolved cases or disputes that are under appeal within the tax administration system.
- Litigation: The process of taking legal action or settling disputes through the court system or administrative tribunals.
- Refund Delays: When tax refunds owed to taxpayers are not issued within the expected timeframe.
- Fraudulent Claims: Attempts to obtain undue financial benefits or refunds by submitting false or misleading information.
- Scrutiny: A detailed examination or investigation, in this context, of tax returns and refund claims.
- Tax Deducted at Source (TDS): A mechanism where tax is collected at the source of income, usually by the payer, before it reaches the recipient.
- TDS Compliance: Adhering to the rules and regulations related to deducting, depositing, and reporting TDS.
