17.18 ndian onom
India’s direct tax collection is not commensurate about 1.09 crore accounts saw average deposit
with the income and consumption pattern of the between Rs. 2 to 80 lakh. Deposits of more than
people: 80 lakh were made in 1.48 lakh accounts with
Corporate tax: As against 5.6 crore informal sector average deposit size of Rs. 3.31 crores. This data
(unorganised sector) individual enterprises and mining will help the Government in increasing
firms doing small business, of which 1.81 crore the tax net and tax revenue in future.
filed tax returns. Out of the 13.94 lakh companies The above-given data can be contrasted with
registered in India, 5.97 lakh filed tax returns the fact that in the last five years, more than
for 2016-17 (Assessment Year) which show the 1.25 crore cars have been sold, and number
following annual profit before tax pattern: of Indian citizens who flew abroad, either for
2.76 lakh companies have shown losses or business or tourism, was 2 crore in the year 2015.
zero income. From all these figures it can be concluded that
India is largely a tax non-compliant society. The
2.85 lakh companies had less than Rs. 1
predominance of cash in the economy makes it
crore profit.
possible for the people to evade their taxes. When
Profit of 28,667 companies was between too many people evade taxes, the burden of their
Rs. 1 crore to Rs. 10 crore, and share falls on those who are honest and compliant.
Only 7781 companies have profit of more
Impact of Demonetization: As per the Economic
than Rs. 10 crores.
Survey 2017-18, one of the aims of demonetization
Individual income tax: As against estimated and the GST (Goods and Services Tax) was to
4.2 crore persons engaged in organised sector increase the formalization of the economy and
employment, the number of individuals filing bring more people into the income tax net, which
return for salary income are only 1.74 crore. In includes only about 59.3 million individual
2015-16 (Assessment Year 2016-17), a total of 3.7 taxpayers (filers and those whose tax is deducted
crore individuals filed income tax returns which at source in 2015-16), equivalent to 24.7 per cent
did show the following annual income pattern: of the estimated non-agricultural workforce.
99 lakh show annual income below the It looks happening! In 13 months from
exemption limit of Rs. 2.5 lakh; demonetisation (November 2016 to November
1.95 crore show income between Rs. 2.5 2017) 10.1 million new income tax filers were
to Rs. 5 lakh; added (in the preceding 6 years only 6.2 million
52 lakh show income between Rs. 5 to new income tax filers were added). Though, the
Rs. 10 lakhs; new tax filers, in many cases reported income close
Only 24 lakh people show income above to tax threshold (standard deduction) of Rs. 2.5
Rs. 10 lakhs; lakhs per annum. As the income growth of such
76 lakh people declared income above Rs. tax filers crosses the threshold, tax revenue of the
5 lakh (56 lakh being salaried class); and Government will also grow.
Only 1.72 lakh people did show income
more than Rs. 50 lakh.
lookinG ahead
The demonetisation process has given the Tax reform has been an integral part of the economic
government new data related to people’s income— reform process in the country. Much reforms have