Deepak Shenoy has a post on the tax number of tax payers in India earning above 20Lakhs being only 408000 (the report says 406000). He links a standing committee report on the Direct Tax Code Bill, 2010. This report has some more interesting numbers. (See page no. 39)
Tax collection numbers
Tax collection numbers
- Rs.1,48,073 crore: Expected income tax collection for 2011-12
- Rs 93,229 crore: ie. 63% tax contributed by tax payers earning over 20 lakhs per year.
Tax payer numbers
- 32.4 mn : Total number of tax payers. ie. a measly 2.66 % of the population pays income tax. Compare this to the US where this number is around 25% or even more.
- 0.406 mn : i.e. 1.3 % of tax payers earning over 20 lakhs. Out of 1.2+ billion people. This number seems too low. Two posibilities.. we are very poor and we also have a lot of black money.
- 28.84 mn : i.e. 89% of tax payers earn < 5 lakh a month and pay 10.1% of total income tax. The committee recommends relying on self compliance for this group of people and exemption from filing returns so that the IT dept can concentrate on higher value targets :-)
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4 comments:
The fact that even in US only 25% pay taxes says that income tax is not the right way for governments to accumulate wealth. I am not even sure if taxes are necessary. Governments need a better model.
Yes, that seems fair. What is revealing in these numbers is how poor our country is and how skewed the wealth distribution is among the tax paying population. I wonder what the distribution is like with people who do not pay taxes.
Actually it is not exactly 'revealing' that our country is poor. It is just that the numbers put the poverty levels into perspective.
Income Tax Payers are 32400000.00
Income Tax Collected 2011-12 is 1480730000000.00
Tax Amount/Tax Payer is 45701.54
Tax Amount/individual of 1.25 Billion is 1184.58
Tax Amount/Individual/Month is Rupees 98.72
If we abolish income tax and just put 2% extra tax on each product. Tax income generated will be much more and everyone is part of tax collection. Since No Income Tax in our country will bring back all the hidden money in banks and automatically rupee will be stronger in Market and immediately the product prices will recover to lower level. Means our country will have strong financial position and stability in Market. Corruption and inflation will go. We will have stable and lower prices like other advanced countries.
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