Data watch: Post Demonetisation, India’s tax base is growing but buoyancy still low

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New Delhi | Updated: October 27, 2018 3:54:30 AM

While the number of individuals declaring income above Rs 1 crore increased about 68%, to 81,344 for the assessment year 2017-18 from 48,416 in assessment year 2015-16, direct tax as percentage of GDP grew marginally, from 5.62% to 5.57%, and direct tax buoyancy remained flat at around 1.2%.

The total number of taxpayers declaring income of more than Rs 1 crore, including companies, rose over 58% from 88,649 in 2013-14 to 1,40,139 in 2016-17.

While the number of individuals declaring income above Rs 1 crore increased about 68%, to 81,344 for the assessment year 2017-18 from 48,416 in assessment year 2015-16, direct tax as percentage of GDP grew marginally, from 5.62% to 5.57%, and direct tax buoyancy remained flat at around 1.2%. The total number of taxpayers declaring income of more than Rs 1 crore, including companies, rose over 58% from 88,649 in 2013-14 to 1,40,139 in 2016-17. Data from the Central Board of Direct Taxes (CBDT) show that the tax base has grown significantly, from 5.3 crore in assessment year 2013-14 to 7.4 crore in assessment year 2017-18. The number of persons filing return of income increased 65%, from 3.31 crore in FY14 to 5.43 crore in FY18.

 

 

Some of the steps taken by the government such as demonetisation, roll-out of the Goods and Services Tax and linking Aadhaar and PAN have helped create a widespread audit trail and pushed the tax base up. The average tax paid by corporates has increased from Rs 32.28 lakh in AY2014-15 to Rs 49.95 lakh in AY2017-18, a growth of around 55%.

The average tax paid by individuals increased 26% from Rs 46,377 to Rs 58,576 during the same period. There is also better compliance among salaried taxpayers vis-à-vis non-salaried taxpayers as the number of salaried taxpayers rose 37% to 23.3 million in the three years ended 2016-17. In contrast, the number of non-salaried taxpayers went up by 19% to 23.3 million.

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