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Higher compliance after demonetisation, GST: Punjab leads region in income tax growth

Income tax officials attribute 18% increase in north-west region to higher compliance after demonetisation and GST

punjab Updated: Oct 05, 2017 09:45 IST
Navneet Sharma
Navneet Sharma
Hindustan Times, Chandigarh
economic slowdown,income tax growth,demonetisation
The increase of 18% in the region is higher than the 16% growth in direct tax revenue reported nationally, according to income tax department sources.(PTI File Photo)

Despite an apparent economic slowdown in the country, Punjab has reported the highest percentage growth in direct tax collections in the north-west region in the first half of the 2017-18 financial year.

Area-wise growth
  • Ludhiana (covers parts of Punjab): 45%
  • Amritsar (parts of Punjab and all of J&K): 85%
  • Panchkula (all of Haryana): 26%
  • Shimla (all of HP): 17%
  • Chandigarh (covers the UT, besides Mohali and Rupnagar in Punjab): 8%

The direct tax collections in the region — comprising Punjab, Haryana, Himachal Pradesh, Jammu and Kashmir and Chandigarh — have grown to Rs 16,750 crore between April 1 and September 30 this year, up from Rs 14,150 crore in the same period of the last fiscal. The increase of 18% in the region is higher than the 16% growth in direct tax revenue reported nationally, according to income tax department sources.

As per the initial revenue data, Punjab has shown the highest growth in the direct tax mop-up in the region, followed by Haryana and Himachal Pradesh. The department has chief commissioners at Ludhiana, Amritsar, Haryana, Shimla and Chandigarh for the four states and the UT of Chandigarh. In the Ludhiana sector, which covers Ludhiana, Moga, Jalandhar, Hoshiarpur, Patiala, Kapurthala, Sangrur, Jagraon, Barnala, Mandi Gobindgarh and some adjoining areas, it is up by 45% in the first six months.

The income tax collection has seen an even higher growth at 85% in the Amritsar sector that covers Amritsar, Pathankot, Gurdaspur, Tarn Taran, Bathinda, Mansa, Muktsar, Ferozepur and Faridkot, and J&K. While the tax mop-up in the Panchkula sector, which has jurisdiction across Haryana, has increased by 26%, Himachal sector has seen growth of 17% in direct tax. At 8%, the Chandigarh sector, which includes Chandigarh, Mohali and Rupnagar, has reported the lowest growth in the region.

A senior I-T official ascribed the buoyancy in collections to higher compliance by individuals and partnership firms — especially small businesses such as kirana or mom-and-pop stores — after demonetisation and Goods and Services (GST). “Though there is a slowdown in economic growth, income disclosure and tax compliance have shown an improvement. If income is Rs 100 and only Rs 60 was being disclosed earlier, now the same person or firm is showing Rs 70. There is scope for full disclosure,” he said, indicating further growth in the remaining six months.

However, revenue from tax deduction at source (TDS) in Punjab, J&K and Chandigarh has shown a minuscule increase of 5% between April and September. “One reason could be non-release or delay in payment of salaries to government employees in Punjab,” said the official. Also, there have been reports of layoffs by industry in Ludhiana and some other places in the past 8-10 months.

First Published: Oct 05, 2017 09:44 IST