In an effort to ease the compliance burden on taxpayers, the Income-Tax department has significantly cut the number of cases selected for scrutiny over the years. Scrutiny by the I-T Department was reduced to 0.25 per cent of the total Income Tax Returns (ITRs) in the assessment year 2018-19, after rising to 0.55 per cent in the assessment year 2017-18, which was the year of demonetisation, according to the data tweeted by the Finance Ministry. The government said that the I-T Dept is changing-from just enforcement to facilitating better taxpayer services. The percentage of ITRs selected for scrutiny had stood at 0.40 per cent in AY 2016-17 and 0.71 per cent in 2015-16.
Though the government did not provide a consolidated number of cases selected for scrutiny across the country, it provided statewise data. Among the major states, Bihar and Jharkhand saw minimum cases related to scrutiny. Out of the total 12.41 lakh ITR filed in Bihar in AY 2017-18, 0.42 per cent of cases were scrutinised, which fell to 0.08 per cent of 16 lakh cases in AY 2018-19. Similarly, out of the total 8.5 lakh ITR filed in Jharkhand in AY 2017-18, 0.3 per cent of cases were scrutinised, which fell to 0.09 per cent of 10.4 lakh cases in AY 2018-19.
On the other hand, Sikkim, Delhi and, Telangana were the states where the percentage of cases for scrutiny was highest (0.5 per cent of the total ITR cases or above). Meanwhile, in the Union Budget 2020, Finance Minister Nirmala Sitharaman announced a new income tax regime that was aimed at lowering the income tax a salaried individual pays. However, the new regime is optional and the taxpayer cannot avail of all the deductions or exemptions that earlier tax regime allowed.