CBDT eyes up to 20% tax-GDP ratio in 5-10 years from 12% now


India registers its highest net direct tax collections at ₹14.09 lakh crore in FY22; figures surpass indirect tax metrics

India registers its highest net direct tax collections at ₹14.09 lakh crore in FY22; figures surpass indirect tax metrics

India’s net direct tax collections amounted to ₹14,09,640.83 crore for FY22, which is the highest collection ever, signaling that the Indian economy has bounced back after two years of the pandemic, said Central Board of Direct Taxes (CBDT) Chairperson J.B. Mohapatra here on Tuesday.

“As against ₹14.09 lakh crore this year, our collection in 2020-21 was only ₹9.45 lakh crore. In a single year, we moved upward by nearly ₹4.5 lakh crore, registering a growth of 49.02%,” said , addressing a press conference.

“The collection of ₹14.09 lakh crore is the best ever collection number as far as income tax and corporation tax are concerned. Before this, only in 2018-19 the department reached a number of ₹11.44 lakh crore.”

Gross direct tax collections (before adjusting for refunds) for FY22 stood at ₹16,34,454.95 crore compared with ₹12,31,270.52 crores in FY21, representing an increase of 32.8%

“Increase in net and gross collection numbers is a major indication of the strengthening of the Indian economy. This gives the clearest signal that the Indian economy has bounced back after two pandemic years,” Mr. Mohapatra said.

“At this point of time, the direct tax-to-GDP ratio is around 12%,” adding that the department was working to raise the ratio to 15-20% in 5-10 years. “The direct tax collection this year has surpassed the indirect tax collection which was other way round till last year. It is now 52%… Our aim is to look at 60% of tax contribution coming from direct tax in some years,” said the CBDT chairperson.

“Apart from the factor of strengthening of Indian economy, the rise in tax collection is attributed to the number of reforms initiated by Indian Government. During past five to six years, the reforms within the department and reforms outside the department contributed a major part in holding the economy together,” he asserted.

The CBDT chairperson elaborated that, “our technological induction improved the department’s functioning and information collection system. Everybody’s financial transaction from different sources and different entities are compiled. It enables taxpayers to see their own transactions in the quickest possible time. Annual Information System (Phase I and II) captures various financial transactions. They are not only compiled, but sent back. This has positive impact on our collection numbers.”

“We are taking steps to expand the taxpayers’ base. We also want taxpayers to migrate from low quadrant taxable entities to higher ones,” said Mr. Mohapatra.

According to CBDT, more than 7.14 crore Income Tax Returns (ITRs) were filed for assessment year 2021-22 on the new e-filing portal, compared to 6.97 crore ITRs filed for AY 2020-21, representing an increase of 2.4%.



Source link