Economy

Why the number of tax payers and car buyers doesn’t tally

PTI New Delhi | Updated on January 16, 2018 Published on December 27, 2016

cars

car-dealership_buyers

24 lakh earn above ₹10 lakh, but 25 lakh cars bought every year

India has just 24.4 lakh tax payers who declared an annual income of over ₹10 lakh yet 25 lakh new cars, including 35,000 luxury cars, are being bought every year for last five years, a top official said.

A nation of over 125 crore people had only 3.65 crore individuals filing their tax returns in the assessment year 2014-15, the official said alluding to a huge number of individuals being outside the tax net.

“Of the 3.65 crore individuals (filing returns in assessment year 2014-15), there were only 5.5 lakh people who paid income tax of more than ₹5 lakh and accounted for 57 per cent of the total tax kitty. This essentially means that only 1.5 per cent of those filing tax returns (3.65 crore) are contributing to 57 per cent of tax kitty,” the official said.

The tax returns when compared with car sales throw astonishing numbers, he said.

“Car sales on an average in last five years has been about 25 lakh per year. In the last three years the car sales were 25.03 lakh, 26 lakh and 27 lakh,” he said adding the statistics point to a large number of people having income to buy cars are outside the tax bracket.

A car normally has a life of seven years and a second car is purchased not before five years by a common man, the official said.

The income tax data collated shows only 48,417 persons reporting income of more than ₹1 crore in a year. Yet luxury brands like BMW, Jaguar, Audi, Mercedes, Porsche and Maserati sell almost 35,000 cars every year.

Of the individuals filing returns, 5.32 lakh were with income of less than ₹2 lakh per annum, and so not within the tax bracket.

He said 24.4 lakh filers declared their annual income of being more than ₹10 lakh and there were 1.47 lakh tax fillers who had an income of over ₹50 lakh in a year.

Also during the 2014-15 assessment year, there were 1.61 crore people whose tax deducted at source (TDS) were deducted but they did not file income tax return (ITR), he said.

India’s tax revenue as a percentage of its GDP was 16.7 per cent in 2016, compared with 25.4 per cent in the US and 30.3 per cent in Japan.

The official said the numbers point to a significant number of people who are liable to pay taxes aren’t doing so.

The government, he said, is shoring up its efforts to check tax evasion.

The November 8 decision to junk old ₹500 and ₹1,000 notes are one of the steps to tackle the menace, he said adding by mandating people to deposit the old currency in banks was a way to account for the unaccounted money and tax them.



Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on December 27, 2016
This article is closed for comments.
Please Email the Editor