The Central Board of Direct Taxes (CBDT) has made significant strides in tax recovery efforts, collecting Rs 20,000 crore in pending dues during the first quarter (April-June) of FY2025, more than double the collections during the same period last year. This impressive performance marks a robust start toward meeting the department's ambitious annual recovery target of Rs 1.96 lakh crore.
According to officials, these recoveries stemmed from demand notices issued by the income-tax department up to March 31, 2025. The collection includes Rs 17,244 crore from corporate tax dues, Rs 2,714 crore from personal income tax, and Rs 180 crore from defaults in tax deducted at source (TDS).
"In the last few years, recovery has been good, and this year our target is to touch at least Rs 2 lakh crore. We will comfortably achieve it," said a senior tax official.
Heightened Enforcement and Zone-Wise Targets
To accelerate collections, the CBDT has directed regional income-tax offices to ramp up enforcement and implement zone-specific recovery targets. The focus will primarily be on cases where appeals have already been ruled in favour of the department at the Commissioner of Income-tax (Appeals) level.
Assessment officers have been instructed to employ comprehensive strategies to recover validated dues, especially in resolved appeals. In FY2024-25, appeals confirmed in favour of the revenue department amounted to Rs 1.96 lakh crore.
Soaring Tax Arrears
Despite the recent success, income-tax arrears remain a pressing concern. As of October 1, 2024, the department's pending tax demand stood at Rs 42 lakh crore, a steep rise from Rs 10 lakh crore in FY2019-20, according to the parliamentary standing committee on finance. Of this, the department aims to recover Rs 27 lakh crore.
In the previous financial year, the CBDT had recovered a record Rs 92,400 crore in outstanding dues, including Rs 67,711 crore in corporate tax, Rs 23,536 crore in personal income-tax and Rs 1,100 crore from TDS shortfalls.
Focus on Under-Reported Income and Tax Evasion
Officials indicated that the next phase of recovery will involve more rigorous scrutiny of suspected cases of under-reporting and deliberate tax evasion. Data analytics, audit trails, and third-party information are being leveraged to track high-risk taxpayers and ensure compliance.
Conclusion
The CBDT's aggressive recovery drive signals a firm commitment to enforcing tax compliance and bridging the tax gap. As the department continues to refine its strategies and intensify efforts, FY2025 could mark a new benchmark in direct tax administration and recovery.
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