Tightening its noose on those who do not pay taxes, the Income Tax Department is likely to soon issue notices to over 10 lakh non-filers.

According to sources, the tax department has prepared a list of non-filers based on their information records.

"Our data analysis shows that there are over 10 lakh non- filers. We will be soon sending them polite letters to seek their response for not filing returns," an official source said.
The source further added that the department is now relying more on technology-driven regime to trace non-filers, rather than depending on heavy-handed administration.

The revenue department has already sent letters in five batches to 1.75 lakh 'high priority cases' seeking whether the person has filed his income tax return or not.

The letter contained the summary of the information of financial transaction(s) along with a customised response sheet.

The I-T department, sources said, has identified PAN holders who did not file returns based on the department's records covering over 4.7 crore Permanent Account Number holders.

The officials have also verified the record of annual information return (AIR), Central Information Branch (CIB) and TDS/TCS returns. Besides, they also verified data available with the Financial Intelligence Unit (FIU).

The letters are a part of the exercise that the Finance Minister P Chidambaram initiated after he took charge of the Ministry in August last year.

Sources said these letters are part of "non-intrusive" tax administration approach that the Ministry is undertaking to collect taxes in a "just and fair manner".

The government plans to collect over Rs 6.68 lakh crore from direct taxes in the current fiscal, up from Rs 5.65 lakh crore in the previous fiscal.