Expecting a major increase in salaries after implementing the 7th Pay Commission for state government employees this year, the state has upwardly revised its budget estimate from income tax (I-T) collection for 2017-18.
Income tax is part of the state's share from central taxes. From Rs 7,463 crore in 2016-17, the estimate has been raised to Rs 9,578 crore for the next financial year. Compared to 2015-16, this is a huge increase of Rs 3,505 crore and the same stood at Rs 2,115 crore over the previous year.
"There will be a significant rise in the income of government employees across the board. This will also increase the total taxable income which will enhance tax collection," said an official from the finance department.
According to officials, there will also be surge in the number of taxpayers as more employees from the lower rung will enter the tax bracket. Apart from this, the internal report based on the salary growth in private sector indicates a 10% increase in salaries in the next financial year.
Taking this into account, the corporate tax has been marginally increased by Rs 217 crore. As against Rs 10,739 crore in 2016-17, the state is expecting to receive Rs 10,956 crore as part of its share in central taxes from corporate tax. Officials said that most companies file their returns though nearly 52% of them operating in the state have shown losses or zero profits.
The state is also pinning its hope on the Union government's efforts to enhance the ambit of taxpayers from Rajasthan and other states.
"There will be higher tax compliance and a major rise in the number of assesses after demonetization. With penalties imposed on late filing of returns and the I-T department becoming more vigilant, more people are expected to pay their tax dues to the government, benefitting both the state and Central governments," said an official from the I-T department.