CBDT plans to send letters to potential taxpayers who are hiding income

The Central Board of Direct Taxes (CBDT) plans to send letters to all the potential taxpayers who have been hiding their actual income, in an attempt to widen the tax base that could potentially increase revenues for the government.

In a letter to regional Income-tax (I-T) heads, CBDT chairman Sushil Chandra has asked for request letters to be sent to all potential taxpayers. "Huge opportunities for identification of potential taxpayers have been opened up by data mining and data analytics in the wake of demonetisation and Operation Clean money," Chandra said.

"About 91 lakh taxpayers were added during FY2016-17. Considering the increase in economic activities, both in the organised as well as unorganised sectors, there is a large scope for further widening of the direct tax base in the country."

To encourage voluntary compliance, tax officers can hold public sessions. "Awareness meetings and outreach programmes may also be used for supplementing these efforts..., especially in tier-2 and 3 cities," the letter said.

I-T chiefs are to develop a regional strategy in line with the specific profile of the area under their jurisdiction to significantly widen the tax base this fiscal year.