The Income Tax Department is set to enhance direct tax collection by profiling districts based on net positive or negative revenues, thereby improving compliance. Additionally, the department plans to tighten regulations on cryptocurrency transactions through the introduction of new specified financial transactions (SFT).
These initiatives are part of the Central Action Plan for the current fiscal year, as detailed by senior officials in an interview with businessline. The measures are deemed necessary due to a ₹81,000 crore shortfall in direct tax collection for FY26, which has resulted in a heightened growth target of 15.25% for FY27, in contrast to the initial budget projection of 11.4%.
One proposed measure is the profiling of districts or relevant areas to assess revenue status and compliance. In instances of negative revenue, the reasons will be identified, followed by appropriate actions. This initiative will require collaboration between field formations and the Directorate of Tax Research and Analysis. Currently, state-wise collection data indicates that Maharashtra leads, followed by Karnataka and Delhi.
Another suggestion involves analyzing various industrial sectors, focusing on five main areas. The first aim is to address negative trends in tax payments, while the second is to scrutinize sector-specific patterns to inform subsequent actions. The third point involves identifying the reasons behind unfavorable tax payment trends or stagnation in advance tax growth. The fourth entails close monitoring of major advance tax payers to encourage reassessment of their advance tax obligations, thus preventing self-assessment tax, while the fifth concentrates on detecting erroneous claims of exemptions and deductions.
Additionally, a significant aspect of the annual plan will involve collecting demands confirmed by the Income Tax Commissioner (Appeal). In FY26, the total demand confirmed from disposed appeals amounted to ₹2.57 lakh crore, and efforts will be directed towards collecting these demands, except where court stays have been issued. Plans are also in place to increase the number of monitored top PAN-wise demands to 10,000. Simultaneously, the department will prioritize the timely issuance of refunds to avoid interest liabilities and raise awareness about the rightful claims for deductions and exemptions, providing education on filing updated returns.
Regarding new initiatives, the first official noted a concerted effort to strengthen regulations around cryptocurrency and virtual digital assets (VDAs). “At least three special pilot projects are being planned to explore the possibility of onboarding new reporting entities or new reportable transactions through new SFTs or expanding the scope of existing SFTs to include crypto/VDAs,” he remarked.
Published on May 10, 2026.
