People earning ₹4 lakh per annum, besides those in tier-II and tier-III cities with taxable income but not paying taxes, are on the radar of the Income Tax department which has launched an ambitious drive to net one crore new assesses this financial year.

The Central Board of Direct Taxes (CBDT), the top policy making body of the IT department, feels if more and more people pay their taxes, the income tax burden of those already compliant could be gradually eased.

“We want at least the people who are earning taxable income to start filing returns. Because, even small payment of tax by a large number of people is a favourable thing and this currently constitutes our tax gap. As far as our understanding goes, people who are not filing returns are people who are earning income of about ₹4 lakh (per year). They are the ones who are missing from our records as filers.

“Then we have people who are filing returns but understating their income. Our approach for them was different but now we are talking about those small taxpayers in the tier-II and tier-III cities who have small income but taxable income. There are about 18-20 per cent people in this bracket who are missing,” CBDT Chairperson Anita Kapur told PTI in an interview.

She said the taxman has started approaching markets and resident welfare associations in large cities to convey the message that they should be paying proper taxes.

The CBDT chief said if these small taxpayers also come into the system, it would give the government “leeway” to reduce overall taxes and also lessen individual income tax.

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