Fall in ITRs in 2018-19 due to inclusion of previous fiscal years return filings: I-T department

The CBDT in its statement on Monday said the 6.74 crore income tax returns filed in the 2017-18 fiscal included 5.47 crore income tax returns (ITRs) for Assessment Year (AY) 2017-18.

Concept Image

Published : May 7, 2019, 3:56 PM IST

New Delhi: The Income Tax Department on Monday sought to justify a sharp 6.6 lakh drop in the number of I-T returns filed online during 2018-19 saying the number shown on its e-filing website for the financial year included returns of previous fiscal years.

While the tax department's e-filing website showed returns filed in 2018-19 fell to 6.68 crores from 6.74 crores in the previous fiscal, the Central Board of Direct Taxes (CBDT) in a statement clarified that the returns filed included those of previous assessment years, excluding which returns filed in 2018-19 showed an almost 19 per cent rise.

But the tax department had in the past taken returns filed in a fiscal year as a composite number to show a year-on-year increase.

The last such statement by the department had come on April 2, 2018, stating the number of ITRs filed in 2017-18, and it did not issue a statement this year on returns filed in 2018-19.

The CBDT in its statement on Monday said the 6.74 crore income tax returns filed in the 2017-18 fiscal included 5.47 crore income tax returns (ITRs) for Assessment Year (AY) 2017-18.

"In comparison, during FY 2018-19, a total of 6.68 crores ITRs were e-filed which included 6.49 crore ITRs of current AY 2018-19, marking an increase of almost 19 per cent," it said in a statement.
Financial year (FY) and assessment year in income tax laws are different.

From an income tax perspective, FY is the year in which income is earned. AY is the year following the financial year in which the taxpayer has to evaluate the previous year's income and pay taxes on it.

For instance, if the financial year runs from April 1, 2018, to March 31, 2019, then it is known as FY2018-19. The assessment year for the money earned during this period would begin after the financial year ends – that is from April 1, 2019, to March 31, 2020. Hence, the assessment year would be AY 2019-20.

The CBDT said that during 2017-18, apart from the returns for fiscal 2016-17 (AY 2017-18), nearly 1.21 crore ITRs were filed for fiscal 2015-16 (AY 2016-17). The balance number of ITRs filed for AY 2015-16 and prior AYs is 0.06 crore.

In comparison, during 2018-19 only 0.14 crore ITRs for fiscal 2016-17 (AY 2017-18) was filed.

"Thus, the apparent decrease in the number of ITRs filed during FY 2018-19 pertaining to earlier years was due to an amendment in Section 139(5) of the Income-tax Act, 1961 brought in vide Finance Act, 2017, w.e.f. April 1, 2018, which mandated that a revised return could be furnished only upto the end of the relevant Assessment Year.

"As a result, only 0.14 crore ITRs pertaining to AY 2017-18 were filed during 2018-19 as these were the revised ITRs for the relevant AY which could only be filed due to change in law and no other ITR of any earlier AY could be filed in view of the amended provisions of law," the CBDT said.

The I-T department further said that the number of paper ITRs for AY 2017-18 was only 9.2 lakh (1.5 per cent of total ITRs filed) and the number of paper ITRs for AY 2018-19 is 4.8 lakh (0.6 per cent of total ITRs filed).

It is evident that most of the taxpayers have steadily switched to e-filing which is clear from the dwindling numbers of paper returns filed for AY 2018-19 compared to earlier years, the CBDT added.

But the tax department had in the past taken returns filed in a fiscal year as a composite number to show a year-on-year increase.

The last such statement by the department had come on April 2, 2018, stating the number of ITRs filed in 2017-18, and it did not issue a statement this year on returns filed in 2018-19.

The CBDT in its statement on Monday said the 6.74 crore income tax returns filed in the 2017-18 fiscal included 5.47 crore income tax returns (ITRs) for Assessment Year (AY) 2017-18.

In comparison, during 2018-19 only 0.14 crore ITRs for fiscal 2016-17 (AY 2017-18) was filed.

It is evident that most of the taxpayers have steadily switched to e-filing which is clear from the dwindling numbers of paper returns filed for AY 2018-19 compared to earlier years, the CBDT added.

ZCZC
PRI ECO GEN NAT
.NEWDELHI DEL7
BIZ-TAX-E FILERS
Income tax e-filers drop by over 6.6 lakh in FY19: Official data
New Delhi, May 5 (PTI) In a first in recent history of tax filings, income tax e-filings in FY2019 have dropped by more than 6.6 lakh, a trend that analysts said was surprising as tax base was expected to increase post demonetisation.
According to statistics put out on Income Tax Department's e-filing website, income tax e-filings in FY 2018-19 was 6.68 crore, down from 6.74 crore in the previous fiscal.
E-filers in FY 2016-17 were 5.28 crore.
Kotak Economic Research in an April 30 report said: "We are surprised with the decline in income tax e-filing in FY2019."
"If the filings are indeed plateauing, it will be a worry for the fiscal which has seemingly shifted its focus to compensatory expenditure," it said. "Tax filings have surprisingly plateaued in FY2019. This is surprising given that post demonetisation it was expected that the tax base would continue to increase."
However, registered filers have been on the rise - they grew by 15 per cent to 8.45 crore as on March 31, 2019, the e-filing website showed.
Registered filers were just 2.7 crore at the end of March 2013 which almost doubled to 5.2 crore in March 2016 and to 6.2 crore in March 2017.
In signs of lower compliance, the ratio of actual filings to registered filers was 79 per cent in FY2018-19, down from 91.6 per cent in the previous fiscal. The compliance ratio was 85 per cent and 83 per cent in the preceding two years. It was 79.3 per cent in FY2014-15, which was a decline from 82 per cent of FY2013-14.
The data showed a steady rise in filers in the Rs 5 lakh to Rs 10 lakh range with 1.05 crore filings in FY2018-19 including 1.02 crore of individual taxpayers.
Kotak said the declining e-filings "does beg the question whether compliance was weaker in the latter part of FY2019 given that the number of registered filers has continued to see steady growth."
"If compliance has been weak, the new government will aim at increasing the filings and collections in FY2020," it said. "A focused utilization of the data on deposits during demonetization could yield better compliance, especially in the higher income brackets."
This combined with the granular GST filing data will be essential in increasing the filings as well as revenues over the next few years, it said. "The task is cut out for the next government looking at improving the tax buoyancy -- essential to fund the increasing transfers in expenditure."
The government needs to look at further expanding the tax base (optimally using the data repository from demonetization and GST). Without a significant improvement in the tax base, the medium-term growth path will be at risk, Kotak said.
It said that while it is hoped that the filings for the assessment year increase (around August when filings are completed), a relatively muted tax filing growth will create further headwinds in an already stressed fiscal space.
"With the recent inception of direct transfers in the budget, the fiscal could easily be on a slippery slope unless there is a rationalization of expenditure," it said adding around 55 per cent of central government expenditure is fixed in nature and the eventual impact could be on further lowering capex.
Given the stressed fiscal space, debt markets are burdened with heavy government and PSE borrowings, which are likely to keep the yield curve steep in FY2020, it added.
Kotak said while a number of activity indicators have been signalling a slowdown in parts of the economy, the tax collections corroborate it too.
"Aggregate indirect tax revenues' buoyancy has been weak along with targets being missed on direct taxes too. Further, persistently high borrowing cost for financial institutions and companies (given crowding out by the government sector) will weigh on the near-term aggregate demand in the economy," it said.
From a medium-term perspective, if the government does not expand its capital expenditure (higher transfers and muted tax growth), the growth prospects will be under doubt given estimated fiscal multipliers, it added. PTI JD ANZ
MR
MR
05051509
NNNN

For All Latest Updates

TAGGED:

ITR

Income Tax return

Income tax

CBDT

Central Board of Direct Taxes

tax

Fall in ITRs in 2018-19 due to inclusion of previous fiscal years return filings: I-T department

The CBDT in its statement on Monday said the 6.74 crore income tax returns filed in the 2017-18 fiscal included 5.47 crore income tax returns (ITRs) for Assessment Year (AY) 2017-18.

Quick Links / Policies

Get Us On

Featured

Could A Water Bottle Obstruct Your Brakes? Dehradun Accident Proves It Can- Know How To Prevent It

Explained - What Is Indictment As Per The US Law?

Menopause; Breaking Silence On The Taboo For Women In India

Kashmiri Sisters Ride The Rainbow To Success In Trout Farming, Harvest 20 Quintals Annually