The number of new taxpayers for 2017-18 expanded by 26% to 6.84 crores, therefore empowering the government to meet direct tax accumulations for the monetary year, the Ministry of Finance declared in an announcement on Monday.
Moreover, net collections (previously refunds) for the financial year were recorded to have expanded by 13% to Rs 11.44 lakh crore. Gross collections for Corporate Income Tax and Personal Income Tax also expanded by around 17% and 19% separately.
“The expansion in complete returns recorded and new returns filed amid FY 2017-18 is a consequence of supported efforts made by the Income Tax Department in catching up with potential non-filers through email, SMS, statutory notices, outreach programs, and so on. Additionally through basic changes made in law and the Government’s accentuation on augmenting of the tax net,” the announcement detailed.
Cause for increase
Tax specialists guarantee that India saw an ascent in taxpayers to a great extent because of the efforts of tax authorities before the Union Budget that was displayed on February 1, 2018. Shefali Goradia, a partner at Deloitte India, said she supposes the Central Board of Direct Taxes ventured up its efforts to collect taxes in December, including seeking after tax overdue debts, which helped increase the tax base.
In 2016-17, because of demonetization, the government figured out how to include about 9.1 million new citizens. This absolutely led to an increase in income collection. Other than demonetization, usage of the GST (Goods and Services Tax) Bill led to an increase in indirect taxpayer citizens by over half. Roughly 34 lakh organizations turned out to be a piece of the taxpayer base, as per the Economic Survey composed by Chief Economic Advisor Arvind Subramanian.
Effect on a monetary shortage
After the usage of the GST Bill, the government income was on the decay. The monetary shortage target was henceforth reconsidered from 3.2 to 3.5 percent. Although there were worries of India overshooting its financial shortage target, authorities have claimed that the monetary shortfall will be smaller than 3.5 percent.
Subhash Chandra Garg, secretary of the Department of Economic Affairs, affirmed in a tweet that monetary shortfall and income deficiency are lower than the reexamined figures for 2017-18.
With almost all of Revenues and Expenditure accounted for (some minor accounting adjustments remaining), I can confirm that both Fiscal Deficit and Revenue Deficit are lower than the Revised Estimates for 2017-18.
The increase in the number of taxpayer citizens will help bring down the weight on the legislative financial shortfall that has been collected.