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 Guidance Note on Audit of Banks (2024 Edition)

Two crore Indians file returns but pay zero income tax
October, 24th 2018

In the last four years, the government's efforts to widen the tax base resulted in an 80% jump in number of returns filed to 6.85 crore in 2017-18 from 3.31 crore in 2013-14. However, a large number of these individuals are paying no tax at all. As many as 2.02 crore individuals filed income-tax returns in 2017-18 declaring their income, but paid zero tax since they are not in the taxable income bracket yet, reported TOI. The number of such companies was 3.9 lakh.

The low numbers of people paying tax may indicate a large number of eligible people still evading taxes. At the last count, there were around 8.6 lakh doctors in the country, but less than half of them paid income tax. One in three chartered accountants — who advise individuals and companies on tax matters — paid income tax. While there are nursing homes every few km, only 13,000 paid taxes. In fact, their number is less than the number of fashion designers (14,500) paying income tax.

In fact, according to the data released by the I-T department on Monday, there is a a massive gap between the salaried, whose taxes are deducted, and the non-salaried. At Rs 5.2 lakh a year, the average annual income of the non-salaried is around 75% of salaried taxpayers, which adds up to Rs 6.8 lakh. The number of salaried taxpayers is rising at a faster pace than the non-salaried, although the count surprisingly is the same — 2.3 crore. On the positive side, over the last four years, there ha ..

The biggest contribution to the tax kitty comes from individuals who have paid tax up to Rs 5 lakh. As many as 2.55 crore filed returns in this bracket and paid Rs 1,21,384 lakh in tax. As many as 14,068 returns were filed in the above Rs 1 crore bracket which contributed Rs 35,464 crore. Only four people filed returns in the above Rs 100 crore bracket, paying Rs 665 crore.in taxes.

Maharashtra and Delhi account for more than half of all income tax collections. However, their share is declining while those of Karnataka, Tamil Nadu and Gujarat — the other big contributors – is on the rise. However, at 38.3%, Maharashtra's contribution to the tax kitty is more than the next four states combined (Delhi 13.7%, Karnataka 10.1%, Tamil Nadu 6.7% and Gujarat 4.5%). Among the major states, Rajasthan has seen the fastest rise in tax collection, which have jumped more than three times ..

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