Only 3.13% of Indians declared tax liability in FY16

22 Dec 2017

A mere 40.7 million people in a country with a population of 1.3 billion (about 3.13 per cent) filed income tax returns in the 2014-15 financial year, indicating rampant tax evasion across the country.

This, represents a 40.8 per cent jump from the number of returns filed for 2011-12, figures for assessment year 2015-16 released by the Income Tax Department showed.

While 40.7 million people filed income tax returns in assessment year 2015-16 (or financial year 2014-15), 8.2 million of them fell in the bracket of zero income tax.

For the same assessment year, only 1,156 individuals showed an income between Rs10 crore and Rs25 crore, whereas nearly 35,000 luxury cars were sold in the country.

Of the 40.8 million taxpayers, 13.3 million people fell in the lowest income tax slab with their incomes ranging between Rs2.5 lakh and Rs3.5 lakh. Only 10 million people paid over Rs1 lakh each as taxes on income.

The tax net, including Hindu Undivided Families, firms, and companies, among others amounted to 43.6 million returns. Also, 16.4 million returns were deemed invalid, even as assessees paid the tax.

Only one person declared income of over Rs500 crore in 2015-16, data showed. As many as 31 people were those who earned between Rs100 crore and Rs500 crore. There were only 17 people in India with an income between Rs100 crore and Rs500 crore in the assessment year 2014-15.

The data showed that a total number of 4.07 crore people filed income tax returns of which 82 lakh individuals had income below Rs 2.5 lakh each, thus falling in the zero tax bracket as no income tax is levied on income of up to Rs 2.5 lakh.

The data, released late Wednesday evening, showed that the base of income taxpayers grew slowly in the assessment years 2012-13, 2013-14 and 2014-15, but it took a leap forward after demonetisation in November 2016, when a whopping 9.1 million new income taxpayers were added to the system, against just 5.4 million in the preceding three years.

The top two highest income taxpaying individuals came from Maharashtra and Delhi. The highest 37 per cent taxes came from Maharashtra, while it was close to 13 per cent in Delhi and Karnataka came third with 10.1 per cent tax payers. Followed by Tamil Nadu, Gujarat, Andhra Pradesh and West Bengal.

The share of direct taxes in the total tax collected by the centre in the financial year 2014-15 was 56.16 per cent.