Economy News

Personal income tax to GDP ratio rises to 2.94% in FY22 – Mintpaisa

Personal income tax as a percentage of GDP fell from 2.11% in 2014-2015 to 2.94% in 2021-22, indicating that the tax base is widening as a result of the measures taken by the current government headed by the Prime Minister. Narendra Modi. In a review meeting with the Central Board of Direct Taxes (CBDT), Finance Minister Nirmala Sitharaman was briefed on the impact of various measures taken by the Supreme Direct Tax Body to broaden the taxpayer base , said the Ministry of Finance.

The ministry said the ratio of personal income tax (PIT), which is paid by individuals, to GDP rose steadily from 2.11 in the 2014-15 financial year to 2. 94 during the 2021-22 financial year.

Personal income tax collection (including securities transaction tax) increased to over Rs 6.96 lakh crore from over Rs 2.65 lakh crore in 2014-15.

Introduction of new data sources in the financial transaction statement (SFT) such as dividends and interest; securities; mutual funds and GSTN information in recent years has resulted in a 1,118% increase in reported information.

This resulted in the addition of information on around 3 million people, according to a statement from the Ministry of Finance.

In addition, the introduction of new withholding tax (TDS) codes, which have nearly doubled from 36 to 65 over the past eight years, has led to an increase in the total number of transactions reported over the financial year 2021-22 to 144 crore compared to the number of transactions reported. in the financial year 2015-16 of 70 crore.

This resulted in the number of unique deducted doubling from 4.8 crore (in 2015-16) to 9.2 crore (in 2021-22). During the meeting, which was attended by Revenue Secretary Sanjay Malhotra, CBDT Chairman Nitin Gupta and all CBDT members, efforts to increase the taxpayer base, ongoing disciplinary proceedings, settlement of claims excuses for delay and the granting of exemptions under certain sections of the Income Tax Act 1961 were considered.

The Minister of Finance stressed that the CBDT should ensure timely and appropriate actions on all requests filed by taxpayers and wished for a reasonable period of time for the elimination of these requests.

She also urged the CBDT to expand and strengthen its efforts to educate taxpayers on the provisions of direct tax laws and their compliance, the ministry said.


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