74% of income tax comes from just 0.8% of filers

Tina Edwin New Delhi | Updated on January 15, 2018


There’s a case for bigger concessions for small tax payers

The NDA government takes heart from the fact that the number of tax filers has swollen to about 4 crore. But just about 3.14 lakh assessees – or less than 1 per cent of those taxpayers – who actually help fill the department’s coffers.

According to recently published Income Tax Return Statistics for Assessment year 2014-15, these 3.14 lakh high-value taxpayers together paid ₹3,30,910 crore as taxes on their incomes, which accounts for 74 per cent of all the taxes that the nearly 4 crore income tax return filers paid that year.

Each of these 3.14 lakh assessees had tax liability in excess of ₹10 lakh for 2014-15; these numbers include 64 assessees who paid on an average ₹1,770 crore each in taxes.

The data also revealed that a total of 391.28 lakh valid tax returns were received by the Income Tax Department from individuals, businesses and companies for the assessment year 2014-15, with ₹4,46,719 crore in total taxes payable.

The number of income tax returns as well as taxes payable by these return filers climbed 25 per cent between 2012-13 and 2014-15.

However, the share of taxes paid by the high-value tax payers in 2014-15 saw only a small change, notwithstanding the increase in the number of tax filers.

The high-value tax filers (of whom there were 2.37 lakh) contributed about 79 per cent of the taxes on income in 2012-13, compared to 74 per cent in 2014-15.

This is because the largest increase in tax return filers was seen among those with tax liability of less than ₹1.5 lakh for the year.

Their numbers rose from 122.21 lakh to 183.67 lakh, a 50 per cent increase.

The average tax paid by this lot of return filers rose 24 per cent to about ₹26,000 in 2014-15 from ₹21,000 in 2012-13.

What all this means is that the government can afford to give more tax concessions to small tax payers without be any serious erosion of tax revenue.

But, of course, the government is always wary of giving concessions that allow people to go off the tax radar.

Published on November 04, 2016

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