Ravi Agrawal, Chairman, CBDT

People using ITR 3 and 4, including businessmen, professionals, freelancers and presumed taxpayers, will have an extra month to file their returns, with the deadline extended to August 31, Ravi Agrawal, Chairman, CBDT told Times of India. extract:What strategies will you use to achieve this?■ Next year’s target is based on nominal GDP growth of 10%, with a tax float on top of this (tax growth as a share of GDP expansion). The projected tax float is reasonable. Therefore, we should see no problem in achieving this goal.We have introduced many initiatives to earn trust, and taxpayers are responding. There is a greater focus on promoting better compliance because it means more conversion of data into revenue. If you can do that, it will help broaden the tax base and deepen the tax base.We will have a new income tax law that will be simpler. The sentiment will be positive, which will help bring greater clarity to the process and trigger greater compliance. We will notify the rules and forms in February. It will streamline processes and forms will become smarter and aligned with tax returns or audit reports to resolve disconnects and discrepancies, if any. Recognizing red flags will be easy.What kind of red flags?■ Red flags, such as incorrect returns or failure to include certain income. We have data, we can do statistics on this. Analysis can help. The process will be enhanced. All of this will send a strong message to the taxpayer community that you need to be consistent. The process has started and people are responding to it.What about broadening the tax base?■ When you talk about broadening, there is also an element of deepening. Deepening means I should have reported X, but I reported X 2. In this case, the returns should reflect higher earnings than shown. To broaden is to broaden the base. This concerns not only those who file returns but also those who have paid tax (either through TDS or TCS) but have not filed returns.There’s a third category: You have certain information, but these are people who neither paid taxes nor filed a return. You need to act scientifically; you must do in-depth analysis and you can only act when the data is mature. Our NUDGE exercise is a step in this direction. We got a very satisfactory reply. In the past two years, 1.1 billion people updated or revised their tax returns, generating additional revenue of Rs 8,800 crore. Of this, refund claims decreased by Rs 1,750 crore. All of this is done in a very non-invasive way and is based on the data we provide. Broadening and deepening depends on the promotion of TDS and data sharing between departments.How big is the data volume? How do you handle and keep this data secure?■ The department processes transaction data of Rs 650 crore annually. We favor getting more data. The department only uses data from completed transactions. The data is 100% secure and there are procedures in place.When is the deadline for certain types of taxpayers to file taxes?■ Currently, the deadline for ITRs 1 to 4 and the unreviewed portion of ITR 5 is July 31. For ITR 1 and 2, we will keep July 31 and for ITR 3 and 4, we will move it to August 31. We often receive complaints about bundling. This is how you stagger compliance and make it easier. We will allow taxpayers to amend until March.How many taxpayers have switched to the new tax regime?■ In the assessment year 2024-25 (FY24), this proportion is 76%; in the assessment year 25-26 (FY25), 88% of taxpayers have switched to the new tax regime.The market response on the first day of STT was poor. Has the matter been resolved? Will it be reviewed?■ Market indications. Nothing yet.