Income Tax Data released: Maharashtra ranked first in tax collection

Introduction

The Central Board of Direct Taxes (CBDT) made public the income tax data collections made in the past 15 years. This is considered to be a major step towards transparent governance.


What is CBDT?


  • CBDT is responsible for collection and monitoring income tax in India
  • Department of revenue is the parent department of CBDT
  • CBDT is under Finance Ministry
  • The chairperson of CBDT is the senior most IRS civil servant
  • Formed in 1922
  • CBDT become a statutory authority under a central board of revenue act, 1963.


How was income tax data published?


  • Data published as Time series analysis with tables and graphs
  • Income tax data for the past 15 years (2000-01 to 2014-15)
  • Figures reported by Controller and Auditor General of India (CAG)
  • Data published along with PAN statistics


Why was income tax data published?


  • To encourage wide use and analysis of income tax data
  • To make data available for Economists, academicians, students, analysts, scholars and researchers
  • To promote transparency in governance 


Some vital income tax statistics


  • Only 4 percent of Indian voters are tax payers as against 23 percent
  • 85 percent of net national income falls outside the tax net
  •  Only 5.16 crore people filed income tax returns in the fiscal year (2015-2016)
  • 63 companies paid tax bills over 500 crore
  • Only 3 individuals paid tax more than 100 crore
  • Direct tax collections have drastically come down with a growth rate of 8.5 percent in 2015-2016 from 14.1 percent in 2011-2012
  • Corporate tax also saw a decline from 15.6 percent in 2011-12 to 7.1 percent in 2015-16
  • Only 13.3 lakh individuals declared to have an income above 10 lakh p.a (This data was used to exclude LPG subsidies to these individuals)


State wise Rankings


  • Maharashtra ranked first with 39.9 % in tax collection
  • Delhi second with 13.1 %
  • Karnataka third with 8.7 %
  • Tamil Nadu Fourth with 6.4 %
  • Gujarat saw 185 % growth in direct tax collections (2015-16) becoming the state with fastest growth
  • Tamil Nadu saw 116 % growth
  • Maharashtra saw 112 % growth
  • West Bengal saw 105 % growth
  • In figures, Mizoram recorded 39.2 crores in 2015-16 which is more than double the amount collected in 2014-15
  • Chattisgarh recorded the low 0.01 % growth in direct tax collections


 Implications


  • These figures indicate that tax evasion is being done on a mass scale from individuals to corporate
  • The worrying aspect is that direct tax collections see a decline in growth rate annually
  • People income is increasing but tax paying individuals are reducing which is an irony
  • According to CBDT, 23 % are accountable to pay tax but only 4 % pay tax indicating the rise in the number of willful defaulters


Way Forward


  • The recent money exchange program of RBI will change the entire statistics of income tax figures
  • Governments recently took steps to monitor gold transactions in jewellery shops by mandating PAN card for transactions above 2 lacs
  • Indirect taxes will be streamlined through the implementation of GST
  • Direct taxes needs such streamlining through PAN card based new acts
  • Benami Transactions Bill passed this month is a positive measure
  • All Acts and welfare measures passed by the government must pass through Bank and Government officials who are corrupt to the core
  • Intermediaries or brokers play havoc and find loopholes to exploit any system
  • The success of all new and progressive measures for economic growth of India lies in the correct implementation without any interference
  • A positive change is possible only when the mindset of the entire stakeholders of the society change in a positive manner

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