81,000 Indians earned in excess of Rs 1 crore in FY17, says CBDT
New Delhi :Over 81,000 Indians earned in excess of Rs 1 crore a year in 2016-17, according to data released by the tax department, an increase from around 46,000 in 2013-14.
Data also shows that India’s income tax buoyancy and direct tax to gross domestic product (GDP) ratio both reached levels they have not seen in the past decade in 2017-18, with the country’s top tax official saying this is a reflection of the “widening and deepening” of the tax base although some experts aren’t sure this is the case.
The number of tax returns increased from 37.9 million in 2013-14 to 68.5 million in 2017-18, which also includes the country’s sudden invalidation of high value currency notes in November 2016.
Incomes of all categories of Indian taxpayers increased by 67% in the last four years, the data released by the income tax department showed. Taxpayers disclosed a gross total income of Rs 44.78 lakh crore in 2016-17 against Rs 26.92 lakh crore in 2013-14.
Releasing key statistics of income tax collection for a period of four years time, the Central Board of Direct Taxes (CBDT) added that the direct tax to GDP ratio grew every year in the three years to 2017-18, touching a decade’s high of 5.98% in 2017-18.
The buoyancy factor, which is the growth in taxes for every unit change in GDP, is also at its highest level in the last 10 years at 1.81.
“As the economy grows, over a period of time the direct tax collection should increase in proportion to indirect tax collection. Direct tax is a more equitable form of taxation and in developed economies its share is higher. This is a global phenomenon and it is good that India is following the trajectory,” said MM Joshi, former CBDT chairman.
While both the tax to GDP ratio and the buoyancy have moved up, the change isn’t significant enough, said one expert.
“The whole argument that demonetisation pushed up income tax collection does not get traction if the tax to GDP ratio or the buoyancy factor is considered from the data provided by the tax department,” said Pronab Sen, former chief statistician of India.
The number of returns filed by taxpayers has also increased by 65% from 33.1 million in 2013-14 to 54.4 million in 2017-18.
“Both widening and deepening of the tax base has taken place during the last four years. It is the impact of three things: legislative amendments, better enforcement and smarter administrative measures,” said CBDT chairman, Sushil Chandra.
The collection and decimation of income tax statistics has helped the department in identifying that the slowest growth in taxpayers and declared income has been for the “non-salaried individual” category.