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India’s Tax Base Has Widened

Source: PIB
GS III: Economy


Overview

  1. News in Brief
  2. How it helps

Why in the News?

India’s tax base has widened sharply since 2013-14.

India’s Tax Base Has Widened
Image by Gerd Altmann from Pixabay
About tax Base

  • With individuals moving up the income ladder and the proportion of superrich taxpayers’ incomes declining.
  • The overall number of income tax (IT) returns filed by individuals has risen from 3.36 crore to 6.37 crore through assessment years 2013-14 to 2021-22.
  • There is also an increase in the number of returns filed by individual taxpayers across various ranges of gross total income.
  • In the range of gross total income up to ₹5 lakh, the number of returns filed by individual taxpayers has increased from 2.62 crore in AY 201314 to 3.47 crore in AY 202122, registering an increase of 32%.
  • This range of income includes individuals having income below the taxable limit who may not be filing returns.
  • For higher income ranges of ₹5 lakh to ₹10 lahks, and ₹10 lahks to ₹25 lakh, the number of individual returns surged 295% and 291% over the period, respectively.
  • This indicates that individual taxpayers are showing a positive trend of migration to a higher range of gross total income.
  • Proportionate contribution of the gross total income of the top 1% of individual taxpayers visàvis all individual taxpayers has decreased from 15.9% to 14.6%
    • The share of the bottom 25% of taxpayers increased from 8.3% to 8.4% over the same period.
  • The proportion of the gross total income of the middle 74% group of individual taxpayers increased from 75.8% to 77% in the above period.
    • The average gross total income for individual taxpayers increased from about ₹4.5 lahks to about ₹7 lakh over the nine-year period, representing an increase of 56%.
  • The increase in average gross total income for the top 1% of individual taxpayers is 42% while that for the bottom 25% of individual taxpayers is 58%.
  • The data indicates robust growth in the gross total income of individuals across different income groups subsequent to AY 2013-14.
  • Adding this was reflected in the increase in net direct tax collections from ₹6.38 lakh crore in 2013-14 to ₹16.61 lakh crore in 2022-23.
 Central Board of Direct Taxes (CBDT)

  • The Central Board of Direct Taxes is a statutory authority.
  • Functioning under the Central Board of Revenue Act, 1963.
  • The officials of the Board in their ex-officio capacity.
  • Also, functions as a Division of the Ministry dealing with matters relating to levy and collection of direct taxes.

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