- Date : 22/11/2018
- Read: 3 mins
While the number of individual crorepatis has swollen by 68% from FY 2014-15 to FY 2017-18, the average amount paid as income tax by an individual has dwindled by 20%
Over the last four years, the government has made a structured impetus to widen the base of taxpayers in the country. The IT department has witnessed an 80% jump in the total number of assessees to 6.9 crore and in the current fiscal that number is expected to go up to 7.6 crore for Financial Year (FY) 2018-19.
The number of assessees has grown from 1.57 crore e-filers in FY 2015 to 3.1 crore e-filers in FY 2018. While the number of individual crorepatis has swollen by 68% from 48,416 in FY 2014-15 to 81,334 in FY 2017-18, the average amount paid as income tax by an individual has dwindled significantly from Rs 50,000 to Rs 40,000.
The new crop of IT filers entering the system is paying minimal to nil by way of income tax. This is primarily because self-employed individuals and professionals are not disclosing their full income.
There are about 8.6 lakh doctors in the country, but less than half pay income tax. Experts in the field of accounting and taxation, the community of chartered accountants sees less than 33% filing an appropriate IT return. Of an estimated 13 lakh lawyers, only 2.6 lakh or 20% pay income tax. Data from the IT department shows a significant difference between returns filed by salaried taxpayers and that of non-salaried/professionals.
On the bright side, there has been a 27% increase in the number of non-salaried declarants in the last four years, compared to 19% in the case of salaried people.
Demonetisation, GST, and penalties on non-filing have led to an increase in the number of tax filings. Despite the expansion in the overall tax base year-on-year, the growth in Personal Income Tax Revenue (PITR) has been significantly lower than in the previous year. FY 2017 witnessed a 29% growth in PITR, while FY 2018 was much lower at 19%.
The tax department has taken cognisance of the disparity and is looking to deepen the tax base. Multiple sources of data will be analysed and those who under-report will be taken to task.
Real estate transactions over Rs 1 crore will automatically attract an advisory for advance tax payment. Similarly, data from bank deposits will be scrutinised, where Tax Deducted at Source (TDS) of 10% from investment yields does not match with the income declaration. Income from overseas deposits, real estate, and other assets will be acquired from host nations.
Targeted action will be considered for certain business segments that are known to under-report sales. It is expected that even though PITR takes a dip in the short term, expanding the pool of taxpayers should yield positive results over the long term.