STATISTICS ON INCOME TAX COLLECTION AND COST OF COLLECTION

[DR.MARIAPPAN GOVINDARAJAN]

The main source of income for any country is tax, collected from the people and on various businesses/profession. The tax is of two types - direct tax and indirect tax. The income tax comes under the purview of the direct tax. It is the main source for our country to meet the public expenditure. Despite our Country is in the top in population all over the world the number of persons paying service tax and filing returns is very less.

Now the trend on payment of income tax is on the increase. This is due to digitalization of the system and the method of e-filing. The following table shows the growth of the income tax collection from the financial year 2000 - 2001 to 2021 - 2022:

Table - 1 : Collection of Income Tax for the period from 2000 - 01 to 2021 - 22

(In crores)

Sl. No.	Financial Year	Income Tax collection
1	2000 - 01	68305
2	2001 - 02	69198
3	2002 - 03	83088
4	2003 - 04	105088
5	2004 - 05	132771
6	2005 - 06	165216
7	2006 - 07	230181
8	2007 - 08	314330
9	2008 - 09	333818
10	2009 - 10	378063
11	2010 - 11	445995
12	2011 - 12	493987
13	2012 - 13	558989
14	2013 - 14	638596
15	2014 - 15	695772
16	2015 - 16	741945
17	2016 - 17	849713
18	2017 - 18	1002738
19	2018 - 19	1137718
20	2019 - 20	1050681
21	2020 - 21	947176
22	2021 - 22	1412422

Source: Dinamalar (Tamil Daily), dated 27.04.23

The above table shows the increase in the collection of income tax year by year except for the years 2019 - 20 and 2020 - 21 because of COVID regime. The reforms in income-tax laws and digitisation of tax administration have raised the level of compliance. “Tools like AIS/TIS (Annual Information Statement/Taxpayer Information Summary) lead to the data of taxpayers being pulled and automatically reconciled by the department. And expansion of TDS/TCS (Tax deducted at source/Tax Collected at Source) provisions help tracking the transactions from the source and up the value stream. These leading to substantial gains in terms of collection,

It is correct to say that expenditure ought to be incurred by the Department for the collection of income tax. The following table will show the cost incurred for the collection of income tax for the period from 2000 - 01 to 2021 - 22-

Table - 2 : Cost incurred for collection of income tax for the period from 2000 - 01 to 2021- 22

(In crores)

Sl. No.	Financial Year	Cost incurred
1	2000 - 01	929
2	2001 - 02	933
3	2002 - 03	984
4	2003 - 04	1050
5	2004 - 05	1138
6	2005 - 06	1194
7	2006 - 07	1349
8	2007 - 08	1687
9	2008 - 09	2248
10	2009 - 10	2726
11	2010 - 11	2698
12	2011- 12	2976
13	2012 - 13	3283
14	2013 - 14	3641
15	2014 - 15	4101
16	2015 - 16	4593
17	2016 - 17	5578
18	2017 - 18	6087
19	2018 - 19	7074
20	2019 - 20	6952
21	2020 - 21	7223
22	2021 - 22	7479

Source: Dinamalar (Tamil Daily), dated 27.04.23.

The reasons for expenses for collection of income tax-

• Salary paid to officers and officials;
• Administrative expenses;
• Capital expenditure;
• Information technology expenses-
• Digitalization;
• E-filing of returns.

Now we may see the percentage of cost of collection to total income tax collection for the above years. The following is the percentage for the years shown-

• 2000 - 01 is 1.36%
• 2005 - 06 is 0.72%
• 2009 - 10 is 0.72%
• 2019 - 20 is 0.66%
• 2020 - 21 is 0.76%
• 2021 - 22 is 0.53%

From the above figures it can be inferred that the cost of collection for income tax for the year is less when compared to the previous years.

The Union finance ministry on reported over 20% year-on-year jump in gross direct tax revenue at Rs. 19.68 lakh crore for the financial year ending March 31, 2023, days after it declared about 22% annualized growth in Goods and Services Tax (GST) collections at Rs. 18.1 lakh crore, reflecting sustained growth in economic activities, better tax administration and ease of compliance.

The provisional figures of direct tax collections for the financial year 2022-23 show that net collections [after refunds] are at Rs.16.61 lakh crore, compared to Rs.14.12 lakh crore in the preceding financial year, representing an increase of 17.63%, the ministry said in a statement.

“ The gross collection (provisional) of Direct Taxes (before adjusting for refunds) for the FY 2022-23 stands at Rs. 19.68 lakh crore showing a growth of 20.33 % over the gross collection of Rs. 16.36 lakh crore in FY 2021-22,” the ministry said in a statement.

It was reported the gross CIT in 2022-23 at Rs. 10,04,118 crore, a 16.91% jump over the gross corporate tax collection of Rs. 8,58,849 crore of the preceding year. Gross PIT collections in FY23 was Rs. 9,60,764 crore (including Securities Transaction Tax or STT), showing a growth of 24.23% as compared to Rs. 7,73,389 crore collected in the same period previous year.

According to the budget documents, the government initially estimated corporate income tax collections in 2022-23 (Budget estimate) at Rs. 7.20 lakh crore and estimated taxes on income or personal income tax at 7 lakh crore. Later, it raised corporate income tax to Rs. 8.35 lakh crore in Revised Estimate for 2022-23 and personal income tax to Rs. 8.15 lakh crore.