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Share of direct taxes projected to fall to a decade low of 5.47 per cent

While just six assessees reported income of over Rs 50 crore during the year, the data released by the tax department showed that less than 5 lakh assessees reported earnings of Rs 1.25 lakh per month.

By: ENS Economic Bureau | New Delhi | Updated: April 30, 2016 1:47:38 am

In the assesment year 2012-13, while more than 3.1 crore income tax returns were filed, less than 20,000 people reported earnings of more than Rs 1 crore per annum. The income disparity, however, is reflected in the fact that these handful of assesses accounted for more than 6 per cent (Rs 38,416 crore) of the total income reported by all assesses put together during the year.

While just six assessees reported income of over Rs 50 crore during the year, the data released by the tax department showed that less than 5 lakh assessees reported earnings of Rs 1.25 lakh per month.

The share of direct taxes in the economy is projected to fall to an almost a decade low of 5.47 per cent in 2015-16, according to the tax data issued by the government. The government was nudged into releasing the tax data after French economist Thomas Piketty in January criticised the difficulty of measuring India’s wealth distribution since the Income Tax Department stopped publishing income tax data in 2000.

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The share of direct taxes to GDP touched a peak of 6.3 per cent in 2007-08 and has since declined to 5.47 per cent in 2015-16, according to provisional figures for the latest reported year. The number was 3.25 per cent in 2000-01.

The data made public by the Central Board of Direct Taxes (CBDT) on Friday shows the total number of taxpayers in the country, income disclosed in returns by various categories of taxpayers and the number of permanent account number (PAN) holders in the country for a chosen period of time. The time series data between fiscal 2001 and fiscal 2015 also discloses the actual direct taxes collection achieved by the income tax department; direct tax to gross domestic product ratio; the cost of collecting the revenue for the government kitty; the number of effective assesses, and workload and disposal of income tax cases. The department has also published statistics filed by taxpayers in their returns for the assessment year 2012-13. It also reveals the PAN allocation across various categories and gender by the end of fiscal 2014.

According to the data, Maharashtra contributed the biggest share of direct taxes at Rs 2.77 lakh crore in 2014-15 when total collections were Rs 6.96 lakh crore. Delhi was second biggest contributor at Rs 91,247.90 crore while Karnataka was third at Rs 60,595.22 crore. Gujarat was fifth with Rs 35,912.46 crore of taxes, behind Tamil Nadu’s Rs 44,732.62 crore. State wise data for 2015-16 was not available.

PM Modi said the decision to release the data was a “landmark” one. “It is a big step towards transparency & informed policy making. Am sure this data will be used by researchers and analysts and lead to enhanced insights for policy making on taxation,” he said on Twitter. The cost of collection has gone down from 1.36 per cent to 0.62 per cent. In absolute terms the spending on collection of taxes has however risen from Rs 929 crore to Rs 4,593 crore during the period.

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