NEW DELHI: Continuous efforts by the income tax department to increase taxpayer base have bore fruits with the number of income taxpayers doubling in the past 10 years even as direct collections have risen three times during the period.
Data released by the income tax department shows total number of income taxpayers increased from 52.6 million in assessment year 2013-14 to 104.1 million in assessment year 2023-24. During the same period, direct tax collection has tripled from Rs 6.38 lakh crore to Rs 19.60 lakh crore.
According to the income tax department, a taxpayer is a person who either has filed a return of income for the relevant Assessment Year (AY) or in whose case tax has been deducted at source in the relevant financial year.
The income tax data also shows that tax buoyancy in 2023-24 is 2.12, which has shown sharp improvement from 1.16 in 2013-14. Tax buoyancy is arrived at by dividing the growth rate of tax collection by the nominal GDP growth rate. A buoyancy of 2.12 means the growth in tax collection was more than double the nominal GDP growth rate in 2023-24.
Data also reveal that direct taxes as a percentage of total taxes collected by the Centre in 2023-24 have risen to 56.72% from 54.63% in the previous year. This is also the highest since 2009-10, when the proportion of direct taxes was 60.78%. In 2013-14, direct taxes accounted for 56.32% of the total taxes collected by the Central government. The direct tax to GDP ratio in 2023-24 was 6.64%, which is highest in the last 25 years. The next best direct tax-to-GDP was recorded in 2007-08 at 6.3%.
Higher proportion of direct tax collection is considered better for an economy as indirect taxes such as GST are considered regressive as the rich and poor pay the same tax on goods and services they purchase.
Tax dept rationalises compounding procedures
NEW DELHI: The income tax department has rationalised and simplified compounding procedures against assesses. To facilitate the compounding of offences by companies and HUFs, the requirement of main accused filing application has been dispensed with. The offences of the main accused as well as any or all co-accused can be compounded on payment of compounding charges by the main accused and/or any of the co-accused, under the revised guidelines.