Wednesday, 27 December 2017

Only 1.7% of India’s population pays income tax

Business hub in Mumbai

Ministry of Finance has revealed that only 2.06 crore people paid income tax in year 2015-16.

Are we that poor? It’s hard to digest these facts that hardly 2 out of  120 people pay income tax to the government in the AY 2015-16. The data further revealed that just over 3 per cent of the 120 crore Indian population filed their tax returns.

While the number of income-tax return filers rose to 4.07 crore in the assessment year 2015-16 (FY 2014-2015) from 3.65 crore in the previous year, only 2.06 crore actually paid their tax as the others claimed income below taxable limits.

Last year, 3.65 crore who filed returns out of which 1.91 crore had paid income tax.
According to the official figures, the maximum amount of 19,931 crore was collected from 2.80 crore tax filers who paid between Rs. 5.5 lakh to Rs. 9.5 lakh in taxes. Data shows that as many as 1.84 crore returns were filed for payment of income tax of less than Rs. 1.5 lakh or an average of Rs 24,000.

Out of the total 4.07 crore tax returns field in AY 2015-16, nearly to 82 lakh declared their income as zero or income less than Rs. 2.5 lakh. Currently, no income tax is levied on income up to Rs 2.5 lakh.

It’s time to say goodbye to the income tax

The total amount of income tax paid by individuals this year has declined to Rs. 1.88 lakh crore in AY 2015-16 from Rs. 1.91 lakh crore in AY 2014-15. The government should positively think of repealing income tax up to Rs 10 lakh rupees.  To manage the fiscal consolidation, we could cancel religious, gas, education subsidies on the basis of PAN/Aadhaar income.

The most striking fact is that only 5 Indians reported income of more than 100 crores; 11 Indians reported income Rs 50 to Rs 100 crores and just 58 Indians declared income between Rs 25 to Rs 50 crores. Then who are owns those Rolls Royce, Lamborghinis and Mercs? In South Mumbai, one of India’s hot properties, rates for 3 BHK sky bungalows range starts from Rs 10 crores. We also here movie actors earning Rs. 100 from a film. As the numbers don’t add up, there is certainly something fishy. It would be advisable to repeal the income tax system to benefit at large of a middle-class population. The decision would boost Ease of Doing Business for MSMEs. Let’s wait what Mr.Jaitley has got to deliver in his ‘last’ full-fledged budget.

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