CBDT Says 56 Lakh Updated ITRs Filed, Rs 4,600 Cr Taxes Mopped Up In 2 Years

The income tax department has garnered about Rs 4,600 crore in taxes from 56 lakh updated I-T returns filed by taxpayers in the past two years, Central Board of Direct Taxes (CBDT) chief Nitin Gupta said.

In a post budget interview to PTI TV, Gupta also said the I-T department has set up a demand management centre at Mysuru, Karnataka, which is focusing on disputed pending large tax demands of above Rs 1 crore.

"We are continuously improving the services and creating litigation free environment. We have come out with a facility for updation of return. 56 lakh updated returns updated and garnered around Rs 4,600 crore taxes from that," Gupta said.

The Interim Budget 2024-25 has announced withdrawal of outstanding small tax demands, some even dating back to 1962, of up to Rs 25,000 till 2014-15 in respect of income, wealth and gift taxes. There are about 1.11 crore such disputed demand entries and the aggregate tax demand involved is Rs 3,500-3,600 crore.

Gupta said the move would benefit about 80 lakh unique taxpayers.

"Small tax demand we are tackling in that (withdrawal of demands) manner and large tax demand we are tackling separately (through demand management centre). We think this exercise would yield quite a lot of dividend to us and we will be able to manage the demand in a more meaningful way," Gupta said.

With regard to withdrawal of disputed demands which is announced in Budget, Gupta said most of these demands are on the books.

There could be cases where the taxpayer has already paid the tax demand but it has not been updated on the system because it's an old demand when everything was manual. Some of the demand could be fictitious as well in that sense, because it is already been paid or not payable by taxpayer but no one has record of this, Gupta explained.

"So to do away with all these and reduce grievances of taxpayers, this is a step we have taken. We believe that a number of entries of that nature what the Finance Minister has spoken about in budget speech could be a crore or more of the number of entries and number of taxpayers could be 80 lakh or so unique ones," he said, adding with this exercise the department can clean its books and it would be beneficial for taxpayers as well.

"The amount Rs 3,500 crore (which is being withdrawn) would be insignificant compared to what we are collecting annually Rs 19.45 lakh crore. This is the right time to do exercise on that front as well and focus on collection of big demand. The manpower is limited and the effort that we will put in to recover or rectify would be much more than the benefit," Gupta said.

The budget 2022-23 had announced a scheme for filing updated returns in ITR-U form. The form can be filed within 2 years of the end of the relevant assessment year, and taxpayers will have to give reasons for updating the income -- return previously not filed or income not reported correctly or wrong heads of income chosen or reduction of carried forward loss.