Taxing times: Income tax filings fall in FY 2019 for the first time in history
May, 06th 2019
For the first time in the history of income tax returns, the number of returns filed dropped in FY19, to 6.68 crore from 6.74 crore in FY18, indicating the waning effect of demonetisation. Compliance has been lower in FY19 compared to the past few years as the ratio of actual filings to registered filers dropped to 79.1% in FY19 from an all-time high of 91.6% in FY18.
The new government will have to look at ways to expand the tax base as muted growth in tax filings will create further headwinds in an already stressed fiscal space. Against the revised estimates, direct tax collection in FY19 fell short by `50,000 crore, and in the current financial year, the budget estimates for direct tax is `13.8 lakh crore, a 15% rise from the revised estimates for FY19.
Interestingly, in indirect taxes, goods and services tax collections touched an all-time high of `1.13 lakh crore in March this year. Strong collections over the last two months reflect the growing compliance with indirect tax laws. The Centre has budgeted total GST collections of `7.6 lakh crore and states have budgeted `6.1 lakh crore, implying a monthly run rate of `1.15 lakh crore.