Did you know that there are only around 35 million taxpayers in India? That might seem like a lot, but when you consider that the population of India is over 1.3 billion people, that number is relatively small. So, who are these taxpayers, and how are they contributing to the country’s economy?
Interestingly, the number of taxpayers in India has been steadily increasing over the past few years. In 2018-2019, the government reported that there were around 62.6 million income tax returns filed, a growth of almost 13% from the previous year. This increase can be attributed to a variety of factors, including the government’s push to bring more people into the formal economy, the introduction of GST, and increased scrutiny of high-net-worth individuals.
But despite this growth, there’s still a long way to go. Many experts estimate that there are millions of Indians who are earning taxable income but don’t file returns. This is partially due to a lack of education about tax laws and procedures, as well as a general mistrust of government institutions. As India continues to develop and modernize, it will be interesting to see how the country grapples with this issue and encourages more citizens to become active participants in the tax system.
Number of Tax Filers in India
According to the latest data released by the Income Tax Department, the number of tax filers in India has been steadily increasing over the years. In the financial year 2020-21, the total number of tax filers in the country stood at 6.48 crore, which is a significant increase from the 5.95 crore tax filers in the previous fiscal year.
- 1.80 crore taxpayers were in the age group of 25-35 years
- 1.77 crore taxpayers were in the age group of 35-45 years
- 1.13 crore taxpayers were in the age group of 45-55 years
- 0.66 crore taxpayers were in the age group of 55-65 years
- 0.42 crore taxpayers were above 65 years of age
The increase in the number of tax filers can be attributed to various factors such as the government’s push towards digitization, increased awareness among taxpayers, and stricter enforcement of tax laws and regulations.
It is interesting to note that a large proportion of the tax filers in India belong to the younger age groups. This is an encouraging sign as it indicates that the younger generation is taking a more proactive role in financial planning and management.
| Year | Number of Tax Filers |
|---|---|
| 2015-16 | 4.07 crore |
| 2016-17 | 4.79 crore |
| 2017-18 | 5.43 crore |
| 2018-19 | 6.33 crore |
| 2019-20 | 5.95 crore |
| 2020-21 | 6.48 crore |
The increase in the number of tax filers is a positive trend for the Indian economy as it indicates a growing culture of compliance and a willingness to contribute towards the country’s development. It is expected that the number of tax filers will continue to rise in the coming years as the government continues to implement measures to simplify the tax filing process and increase awareness among taxpayers.
Income tax revenue in India
Income tax is one of the main sources of revenue for the Indian government. The income tax revenue generated in India has been increasing over the years. In the financial year 2019-20, the gross direct tax collection was ₹11.37 lakh crore, and the net collection was ₹9.78 lakh crore. This was an increase of 6.91% from the previous financial year.
The increase in income tax revenue can be attributed to the following factors:
- The increase in tax base due to the implementation of the Goods and Services Tax (GST).
- The increase in compliance due to the introduction of e-filing of income tax returns.
- The crackdown on black money and tax evasion.
Number of income tax payers in India
The number of income tax payers in India has been increasing gradually over the years. In the financial year 2018-19, the number of income tax returns filed was 6.68 crores, which was an increase of 1.36% from the previous year. However, this number is still low compared to the total population of India.
The table below shows the number of income tax returns filed in India from the financial year 2014-15 to 2018-19:
| Financial year | Number of income tax returns filed |
|---|---|
| 2014-15 | 3.65 crores |
| 2015-16 | 4.07 crores |
| 2016-17 | 4.92 crores |
| 2017-18 | 6.74 crores |
| 2018-19 | 6.68 crores |
It is important to note that the number of income tax payers does not include individuals who do not earn enough to be eligible to pay income tax. The government has been making efforts to increase the tax base by bringing more people under the tax net.
Tax structure in India
Tax structure in India is an important aspect of the country’s economy. The Indian Income Tax Act, 1961 is the governing law that covers all income tax related matters in the country. According to the latest statistics available, there are approximately 90 million income tax payers in India. The tax structure in India is divided into two categories:
- Direct Taxes
- Indirect Taxes
Direct taxes are levied directly on the taxable income of an individual, while indirect taxes are levied on the goods and services consumed. In India, the direct tax system is highly progressive, which means that those with higher incomes are taxed at a higher rate than those with lower incomes.
The direct tax structure in India includes income tax, corporate tax, and wealth tax. Income tax is the tax levied on the income of individuals, while corporate tax is levied on the profits earned by companies. Wealth tax, on the other hand, is levied on the ownership of assets such as property, shares, and jewellery.
Indirect taxes in India include Goods and Services Tax (GST), excise duty, customs duty, and value-added tax (VAT). GST is a recent addition to the Indian tax system and is a unified tax system that replaced all the previous indirect taxes like VAT, excise duty, and service tax.
| Tax Type | Applicable Rate | Applicable Income Range |
|---|---|---|
| Income Tax | 5% to 30% | Rs. 2.5 lakh to Rs. 20 lakh and above |
| Corporate Tax | 22% (for companies with a turnover of up to Rs. 400 crore); 30% (for companies with a turnover of more than Rs. 400 crore) | N/A |
| Wealth Tax | 1% | Net wealth above Rs. 30 lakh |
The tax structure in India is subject to change as per government policies and regulations, so it’s crucial to stay up to date with the latest amendments to the tax laws.
Tax Evasion in India
Tax evasion is a serious problem in India. Despite the government’s efforts to tackle it, a large number of tax evaders continue to operate, thereby depriving the exchequer of much-needed revenue. The number of income tax payers in India stands at around 84 million, which is a relatively small percentage of the country’s population of 1.3 billion.
- According to a recent study, the informal sector accounts for around 50% of India’s GDP, which makes it difficult for the government to keep track of all economic activity and collect taxes.
- Another major problem is the complex tax system, which is often confusing and time-consuming to navigate. This leads to many taxpayers either under-reporting their income or not filing tax returns at all.
- The lack of awareness and education about the importance of paying taxes also contributes to tax evasion in India.
Despite these challenges, the Indian government has taken several steps to curb tax evasion. The introduction of the Goods and Services Tax (GST) has helped to simplify the tax system and make it easier for businesses to comply with tax regulations. The government has also launched several initiatives to encourage tax compliance, such as the ‘Operation Clean Money’ campaign, which aims to identify and penalize tax evaders.
One of the most effective ways to combat tax evasion is to increase transparency and accountability in the tax system. The government has made efforts to digitize tax records and increase the use of technology to track tax evasion. However, more needs to be done to address the root causes of tax evasion in India.
| Year | Number of Income Tax Returns Filed | Gross Total Income (in INR crore) |
|---|---|---|
| 2014-15 | 37.4 million | 26,49,000 |
| 2015-16 | 50 million | 43,56,000 |
| 2016-17 | 53 million | 57,25,000 |
| 2017-18 | 68 million | 77,00,000 |
As the table above shows, the number of income tax returns filed in India has been steadily increasing in recent years. This is a positive development, as it indicates that more people are becoming aware of their tax obligations and are complying with tax regulations. However, there is a long way to go in terms of reducing tax evasion in India.
Impact of GST on Income Tax
In India, the number of income tax payers has been steadily increasing over the years. As of 2019, there were approximately 84 million registered income tax payers in the country. However, the implementation of Goods and Services Tax (GST) has had a significant impact on income tax collection in India.
- Reduced complexity: GST has simplified tax compliance for businesses, which in turn has led to increased tax collection. This has also led to an increase in the number of taxpayers, as more businesses are motivated to become compliant with GST.
- Increased tax base: With the introduction of GST, many unregistered businesses have become a part of the tax net. This has led to an increase in the tax base, which has ultimately increased income tax collections in the country.
- Offsetting effect: GST has a counterbalancing effect on income tax revenue. While GST has increased tax collections, there has been a corresponding decrease in direct tax collections. This is because of the input tax credit system, which allows for a credit of the tax paid on inputs against the tax payable on the final output.
The impact of GST on income tax has been significant. The introduction of GST has not only led to a simplified tax system, but it has also increased compliance, widened the tax base, and ensured transparency in tax collection.
However, there are also some negative implications of GST on income tax. For instance, GST has negatively impacted small businesses, who are required to pay GST even if their turnover is below a certain threshold. This has resulted in an increase in compliance costs and has adversely affected the ease of doing business for small enterprises.
Impact on Service Tax
Service tax, which was a major contributor to the total tax revenue, has been subsumed by GST. The introduction of GST has led to a significant reduction in service tax collections. However, the government has compensated for this loss by increasing the GST rates on certain services.
Conclusion
In conclusion, the impact of GST on income tax has been both positive and negative. While it has increased tax collections and simplified the tax system, it has also negatively affected small businesses. Nonetheless, the implementation of GST has been a positive step towards creating a more efficient and transparent tax system in India.
| Year | Number of Income Tax Payers |
|---|---|
| 2015-16 | 63.7 million |
| 2016-17 | 74.3 million |
| 2017-18 | 84.2 million |
The table shows the increase in the number of income tax payers in India over the years.
Tax reforms in India
India has witnessed significant tax reforms over the years. These reforms aim to simplify the tax system for both taxpayers and officials while increasing revenue for the government. One of the critical aspects of tax reform is the calculation of the number of taxpayers in India. The following subsection will discuss the number of income tax payers in India.
- In the Financial Year (FY) 2020-2021, there were approximately 5.9 crore income tax payers in India. Of these, about 2.1 crore were individual taxpayers.
- The number of taxpayers has seen an upward trend over the years. In FY 2015-16, the total number of taxpayers was about 4.1 crore, which increased to 5.9 crore in FY 2020-21.
- The tax base has expanded due to digitization and increased enforcement measures, which have helped identify non-filers and under-reporting of income cases.
The government has introduced several measures to increase compliance and simplify the tax system for taxpayers. Some of them include:
- Introduction of the e-assessment system to make the assessment process fairer and more transparent
- Lowering tax rates for individuals and corporates to promote investment and economic growth
- Introduction of the faceless assessment scheme for scrutiny assessments to eliminate any bias or personal interference in the assessment process
Moreover, the government has also launched several initiatives to increase tax awareness and promote voluntary tax compliance. For instance, the government has launched the ‘Transparent Taxation – Honouring the Honest’ platform, which includes several measures such as faceless appeal, faceless assessment, and faceless penalty. These measures aim to encourage tax compliance and build trust between taxpayers and officials.
Apart from this, the government has also enhanced the use of technology in the tax system by introducing initiatives such as the ‘Aaykar Setu’ and ‘e-assessment’ apps. These apps offer several services, including filing tax returns, tracking refunds, and resolving tax-related queries, among others.
| Year | Total Number of Taxpayers | Individual Taxpayers |
|---|---|---|
| 2015-16 | 4.1 crore | 2.5 crore |
| 2016-17 | 4.1 crore | 2.6 crore |
| 2017-18 | 6.8 crore | 5.8 crore |
| 2018-19 | 6.8 crore | 5.4 crore |
| 2019-20 | 5.9 crore | 2.4 crore |
In conclusion, the number of taxpayers in India has shown an upward trend over the years, thanks to several tax reforms introduced by the government. The government’s initiatives to increase awareness about tax compliance have also played a significant role in improving the tax base. The introduction of technology in the tax system has further simplified the process for taxpayers and officials. All these measures aim to promote voluntary tax compliance and increase revenue for the government.
Comparison of Indian and global income tax systems
Income tax systems vary from country to country. Different governments implement their own taxation policies based on factors such as economic stability, social welfare programs, and government expenditure. In India, the income tax system is overseen by the central government, which mandates all eligible taxpayers to pay their income taxes annually. This article will delve into the comparison of Indian and global income tax systems.
- Number of Income Tax Payers: According to data released by the Indian government, there were approximately 88.80 million income tax payers in India for the financial year 2017-18. This figure includes both individual and corporate taxpayers. However, this number is relatively low considering India’s population of 1.3 billion.
Comparatively, the United States— with a population of 328 million— had approximately 150 million individual income tax payers in 2019. This means that a larger percentage of the US population pays income taxes compared to India. The income tax system in the US is more complex compared to India, with different tax rates applying depending on an individual’s income bracket. Apart from the federal tax, individual states in the US also impose a state income tax.
Similarly, China— with a population of 1.4 billion— had nearly 290 million registered taxpayers for the year 2019. The Chinese government follows a progressive taxation system, whereby taxpayers are taxed based on their income levels. Like in India, there are tax deductions available for certain expenses.
It is worth noting that not all countries have an income tax system. Some countries— such as the United Arab Emirates— do not impose income tax on individual earnings. In the UAE, only commercial entities are required to pay taxes. However, other means of tax collection are in place, such as value-added tax (VAT).
Conclusion: Comparison of Indian and global income tax systems
Overall, the number of income tax payers in India is relatively low, considering the size of its population. However, the Indian government has been taking steps to increase the tax base by implementing initiatives such as demonetization and GST implementation. When compared to other countries, the Indian income tax system is relatively straightforward with a flat tax rate applying to all taxpayers. However, the tax rate may vary depending on the taxpayer’s income bracket in countries such as the US and China.
| Country Name | Population | Number of Income Tax Payers (Year) |
|---|---|---|
| India | 1.3 billion | 88.80 million (2017-18) |
| United States | 328 million | 150 million (2019) |
| China | 1.4 billion | 290 million (2019) |
Source: Indian government, IRS (US), State Administration of Taxation (China)
FAQs About How Many Income Tax Payers Are in India
Q: How many income tax payers are there in India?
A: As of 2021, there are approximately 8.46 crore income tax payers in India.
Q: Are all working individuals required to pay income tax in India?
A: No, not all working individuals are required to pay income tax. Income tax is only levied on individuals who meet certain income thresholds as per the Income Tax Act.
Q: What is the income threshold for paying income tax in India?
A: The income threshold varies depending on the age and gender of the individual. For example, for individuals below 60 years of age, the income threshold for the financial year 2021-22 is Rs. 2.5 lakhs.
Q: Are there any exemptions on income tax payments in India?
A: Yes, there are several exemptions and deductions available under the Income Tax Act, such as those for savings and investments, medical expenses, and home loans.
Q: How does the government ensure that income tax is paid by all eligible individuals?
A: The government has several measures in place to ensure compliance with income tax laws, such as regular audits, electronic reporting, and penalties for non-payment or underpayment of taxes.
Q: What is the importance of income tax payments for the Indian economy?
A: Income tax payments are essential for the development and growth of the Indian economy. They provide the government with the necessary funds to invest in infrastructure, public services and welfare schemes, and other crucial areas.
Closing Thoughts
Now that you’re aware of how many income tax payers are in India and the various aspects related to income tax payments, it’s important to ensure you are complying with the relevant laws and regulations. Remember, proper income tax payment is not only a legal requirement but a vital contribution towards the progress of the country. Thank you for reading, and do visit again for more informative articles!