Tax defaults in India skyrocket by 1000% over last 10 years, litigations double: Report

Corporate taxes formed a large bulk of the defaults, adding up to ₹3.97 lakh crore and capital gains tax and transfer pricing defaults was ₹4.81 lakh crore.

Published on: Aug 4, 2024, 19:56:15 IST

By HT News Desk

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Tax defaults in India have skyrocketed by 1000% in the last ten years and litigation associated with it has also consequently risen, according to a Moneycontrol report, which cited data compiled from various Union Budgets.

Tax defaults in India skyrocketed by 1000% in the last ten years and associated litigation has also consequently risen (Representational Image/Pixabay)

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How much tax default did India witness?

Tax notices of ₹9.08 lakh crore are unpaid in the financial year 2022-23, compared to ₹80,003 crore in 2013-14. However, notices adding up to ₹4.23 lakh crore were sent just less than two years ago.

Notices totaling ₹2.13 lakh crore were sent between 2-5 years back, while nearly ₹1.43 lakh crore of taxes remain unpaid after 10 years.

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Corporate taxes form a bulk of the defaults. Unpaid corporate taxes added up to ₹3.97 lakh crore and income other than corporate tax defaults, which includes capital gains tax and transfer pricing, was ₹4.81 lakh crore.

This can be attributed to multiple factors like the complexity and frequent changes in the law which creates confusions for businesses, and tax notices being sent to companies under the Insolvency and Bankruptcy Code(IBC), according to the report which cites legal experts.

How much has tax-related litigation increased?

Consequently tax-related litigation has also sharply increased, more than doubling to ₹12.21 lakh crore in 2022-23, compared to ₹5.03 lakh crore in 2013-14.

Corporate tax litigation accounted for ₹6 lakh crore and income other than corporate amounted to ₹4.5 lakh crore.

However, indirect taxes like GST accounted for only ₹2,317 crore, but is expected to rise next year due to the number of GST notices given to various companies according to the report.

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HT News Desk
Follow the latest breaking news, major developments and agenda-setting stories from India and around the world with the newsdesk at Hindustan Times. Operating round the clock, the desk brings together experienced editors, reporters and correspondents to deliver fast, accurate and contextual reporting across subjects that influence public policy, governance, business, society and international affairs. The HT News Desk covers politics, elections, government policies, the economy, business and markets, science and technology, the environment, law and order, infrastructure, education, climate issues and geopolitics, while closely tracking developments across states, institutions and global capitals. The team also leads coverage of major breaking news events, policy announcements, court proceedings, natural disasters, public emergencies and significant international developments. Reports published by the newsdesk are based on information gathered from reporters on the ground, official statements, government agencies, court records, regulatory filings, recognised institutions and other authoritative sources. Stories undergo editorial scrutiny and verification processes to ensure accuracy, fairness and relevance, and are updated as events evolve and additional information becomes available. Whether covering a key political decision in New Delhi, an economic policy shift affecting millions, a landmark court ruling or a major global event, the HT News Desk aims to provide readers with reliable, fact-based journalism that delivers not only the latest developments but also the context and analysis needed to understand their wider implications.Read More

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