Monitor Top Advance Tax Payers, Check Fake Claims: CBDT to I-T Dept
By Author | May 5, 2025 | CBDT News
CBDT’s Focus on Boosting Direct Tax Collection
The Central Board of Direct Taxes (CBDT) has instructed income-tax officials to closely monitor the top advance tax payers. The aim is to detect bogus claims of exemptions and deductions, which will support efforts to improve direct tax collections in FY 2025–26.
According to official sources, the CBDT issued its Central Action Plan (CAP) for the year. This plan outlines performance goals for revenue collection across the department.
Government Targets Rs 25.20 Trillion in Direct Tax
The Union government set a direct tax target of Rs 25.20 trillion for FY 2025–26. This includes:
- Rs 10.82 trillion from corporate tax
- Rs 13.60 trillion from non-corporate taxes (including personal income tax)
- Rs 78,000 crore from Securities Transaction Tax (STT)
In FY 2024–25, net direct tax collections grew by 13.57% to over Rs 22.26 trillion. However, they slightly missed the revised target due to the issuance of record-high refunds.
Action Plan: Track Trends, Curb Fake Claims
The CAP advises tax officers to carry out sectoral analysis. The goal is to spot sectors showing negative tax trends and take corrective action. It also instructs officials to monitor advance tax payers—both individuals and companies—and encourage accurate reassessment of liabilities.
The department will investigate incorrect exemption and deduction claims that reduce genuine revenue. It will also profile districts and regions to identify low-performing areas and take corrective steps.
Tackling Arrear and Current Demand
CBDT has emphasized the importance of collecting both arrears and current dues. The department must act against non-compliant tax payers and pursue demands upheld by the Commissioner of Income Tax (Appeals).
In FY 2024–25, CIT (Appeals) confirmed demands worth Rs 1.95 trillion. Assessing officers are expected to make all efforts to collect this sum within the fiscal year.
Educating Taxpayers and Streamlining Refunds
The CAP encourages tax departments to conduct outreach programs. These sessions will raise awareness about:
- Correct claims for deductions
- Updated Income Tax Return (ITR) filing
The department expects these efforts to promote the new tax regime, which offers a flat rate without deductions or exemptions. This shift may reduce fraudulent claims.
CBDT also aims to issue refunds quickly to prevent interest payments and negative budget impacts. Refunds hit an all-time high in FY 2024–25, with Rs 4.76 trillion disbursed—a 26.04% rise from the previous year.
Arrear Demand Still a Challenge
The CBDT noted a steep rise in arrear demand, now standing at Rs 48.17 trillion. Reducing this figure remains a high priority in the coming months.
