Only 14 lakh Indians out of the total population of about 123 crore had declared an annual income of over Rs 10 lakh, attracting the highest tax bracket of 30 per cent, in assessment year 2012-13. They have contributed to 75% of the country’s tax collection; says an internal report prepared by the tax department.
As the tax department collects more data, revenue secretary, Hasmukh Adhia says that in the last two years when the population increased to 133 crore, there has only been a minor addition to the number of people earning over Rs 10 lakh per annum. This indicates an immediate need for widening the tax base in India.
“14 lakh people or just 4.6% of the total 2.89 crore assessees paid taxes in the highest 30% tax bracket. The data reveals very clearly that there is a need for widening and deepening of the tax net now,” Revenue Secretary Hasmukh Adhia told HT.
The analysis further revealed that of the total 2.89 crore individual taxpayers who filed returns, 1.63 crore people or 56.4% did not pay taxes, that is, fell in the ‘zero tax’ category. Sources in the revenue department say that this data is startling because it brings to light the huge number of people who are claiming to earn less than the taxable income. “Does this mean this group is avoiding tax payment? Could be, we are studying the data carefully,” says an official in the tax department, requesting not to be named. He added that, “If the people of India want the tax rates to come down, we have to ensure everyone is paying the correct amount of tax.”
The data showed there were 2,669 taxpayers with an income exceeding Rs 5 crore who accounted for 9.6% of taxes collected.
The data also showed that there were 1.51 crore individuals whose tax was deducted at source, but did not file returns. “People not filing returns is a big concern. If caught prosecution can be mounted against them,” said Adhia.
The revenue department, sources said, will soon come out with fresh data for assessment year 2013-14 and it will be used in formulating strategy for widening the tax base.
The income tax slabs in India provide for not taxing people earning below Rs 2.5 lakh per annum. Income between Rs 2.5 lakh to Rs 5 lakh would mean a 10% tax while Rs 5 lakh to Rs 10 lakh attracts 20% tax and income above Rs 10 lakh means 30% tax.