Economy

Over ₹8.4 lakh crore income tax outstanding, says Finance Ministry

BL New Delhi Bureau | | Updated on: Apr 05, 2022

FM Nirmala Sitharaman said the positive impact of corporate tax reduction is now visible

Over one crore individuals have outstanding income tax demand of over ₹8.40 lakh crore as on April 01, 2022, Finance Ministry informed Rajya Sabha on Tuesday. It also mentioned that over ₹21,000 crore was lying unclaimed with Life Insurance Corporation of India (LIC).

Outstanding demand

In a written reply, Minister of State for Finance Pankaj Chaudhary said that taxes on income other than corporate tax dropped to over ₹4.70 lakh crore in FY2020-21 from ₹4.80 lakh crore in FY2019-20. However, it is higher than ₹4.61 lakh crore of FY2018-19.

Talking about outstanding demand with respect to individuals, he said that the total number of individuals with outstanding demand, is over 1.31 crore with an outstanding demand of over ₹8.40 lakh crore. “The PANs with an aggregate demand (for all AYs) exceeding ₹100 for the summary have been taken,” he said.

Further, he mentioned that the Government has taken measures for expeditious recovery of outstanding taxes as per the provisions of the Income Tax Act, 1961. Strategies and targets for recovery of arrears of taxes are laid down as part of the Annual Central Action Plan document of the Central Board of Direct taxes.

Efforts of the assessing officers to recover the outstanding demand are regularly reviewed and monitored. Databases like Individual Transaction Statement and those maintained by other agencies like FIU-IND are identification of assets for recovery. “In case of any refund due, the same is adjusted against the outstanding demand as per procedure,” he said.

Unclaimed amount with LIC

Replying to a question through written reply, Chaudhary’s colleague in the Finance Ministry, State Minister Bhagwat Karat said that LIC has placed the information on unclaimed amounts on its website and policyholders/legal heirs can check the unclaimed amounts on the website against their policy number.

“LIC has informed that as on December 31, 2021, it has an outstanding unclaimed (for a period not exceeding 10 years) amount of ₹21,336.28 crore under individual and group business policies,” he said. Further, he mentioned that till September 20, 2021, an amount of ₹1,255.66 crore that had remained unclaimed (for more than 10 years) was transferred to SCWF (Senior Citizen Welfare Fund).

Effect of corporate tax cut

Income Tax Act provides an option to existing domestic companies to pay tax at concessional rate of 22 per cent (plus applicable surcharge and cess), provided they do not avail any specified exemptions or incentive. Further, it was also provided that such companies are not required to pay any Minimum Alternate Tax (MAT).

In a written reply, Finance Minister Nirmala Sitharaman said that collection through corporate tax during the financial year 2021-22 rose to over ₹7.20 lakh crore as against ₹6,63 lakh  crore for financial year 2018-19 (financial year before corporate tax reduction). “This shows that the positive impact of corporate tax reduction is now visible and in spite of reduced tax rate and Covid-19 pandemic, corporate tax collection is higher this year,” she said.

She also informed that for Assessment Year 2020-21, 1,244 taxpayers have opted for paying taxes at the rate of 15 per cent (plus surcharge and cess), However, not all new manufacturing companies may have opted for provisions under section 115BAB. Some may have opted for tax under the normal provisions, depending upon whether the same is more beneficial, she clarified.

Published on April 05, 2022
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