Revenue targets look elusive as 13 of 18 income tax regions fail to achieve targets
12 November 2018
The Income Tax Department may miss the revenue collection target for the current fiscal as tax collections for the first two quarters have fallen far short of the target set in the budget.
Income tax collections for the first two quarters of the current financial year are expected to fall short of the revenue collection target for the fiscal as only five out of the 18 income tax regions have managed to achieve collection targets, s per numbers released by the Income Tax Department.
Only five I-T regions — Delhi, Uttar Pradesh (E), Uttar Pradesh (W), Odisha and the North-East —managed to achieve the revenue goals in the first two quarters of the fiscal, a mid-term review by the Central Board of Direct Taxes (CBDT) showed.
Mumbai, the country’s commercial capital, which contributes 32.24 per cent of the country’s total income tax revenue, has been the biggest laggard, with just 3.8 per cent growth in collections against a targeted growth of 13.3 per cent, as per data released by the CBDT.
For 2018-19, the CBDT has set a collection target of Rs3,70,000 crore as the target for Mumbai, against the all-India target of Rs11,50,000 crore.
However, the Delhi region, which was given a target growth rate of 15.4 per cent, managed to achieve an actual growth rate of 52.8 per cent. For the current fiscal, the total revenue target for the Delhi region is Rs1,50,000 crore.
For industrially developed region such as Pune, the target was 20.1 per cent while it managed to achieve a growth of 15.4 per cent. The total revenue target for the Pune region is Rs61,931 crore, as per CBDT sources.
Other laggards in revenue collection include income tax regions such as Rajasthan, Madhya Pradesh and Chhattisgarh, Bihar and Jharkhand and Nagpur. The Rajasthan region, which was given a growth target of 19 per cent, reported a negative growth of 0.3 per cent. Madhya Pradesh and Chhattisgarh region was given a target of 17.3 per cent but achieved only 5.8 per cent growth. Nagpur, which was given a growth target of 21.8 per cent, managed a negative growth rate of 39.2 per cent. The total revenue collection target for Nagpur for the fiscal is Rs5,906 crore.
Also, the CBDT has found that time-bound disposal of scrutiny assessment of assessees is still pending in 2,14,000 cases at the all-India level as only 13 per cent of pending cases were actually disposed of by I-T Commissioners.
At the beginning of every fiscal, the CBDT sets the targets in the Central Action Plan for the full year. The plan document is the key roadmap for enhancing revenue collection.
In an earlier release relating to direct tax collections, the CBDT had provided time-series data as updated up to FY 2017-18 and income distribution data for AY 2016-17 and AY 2017-18.
- There is a constant growth in direct tax-GDP ratio over last three years and the ratio of 5.98 per cent in FY 2017-18 is the best DT-GDP ratio in last 10 years;
- There is a growth of more than 80 per cent in the number of returns filed in the last four financial years from 3.79 crore in FY 2013-14 (base year) to 6.85 crore in FY 2017-18; and
- The number of persons filing income tax returns has also increased by about 65 percent during this period from 33.1 million in FY 2013-14 to 54.4 million in FY 2017-18.
There has been continuous increase in the amount of income declared in the returns filed by all categories of taxpayers over the last three assessment years (AYs). For AY 2014-15, corresponding to FY 2013-14 (base year), the return filers had declared gross total income of Rs26,92,000 crore, which has increased by 67 pe5r cent to Rs44,88,000 crore for AY 2017-18, showing higher level of compliance resulting from various legislative and administrative measures taken by the government, including effective enforcement measures against tax evasion.
The total number of taxpayers (including corporates, firms, HUFs, etc) showing income of above Rs1 crore also registered a sharp increase over the three-year period. While 88,649 taxpayers disclosed income above Rs1 crore in AY 2014-15, the figure was 1,40,139 for AY 2017-18 (growth of about 60 per cent).
Similarly, the number of individual taxpayers disclosing income above Rs1 crore increased during the period under reference from 48,416 to 81,344, which translates into a growth of 68 per cent.
The average tax paid by corporate taxpayers has increased from Rs32,28,000 in AY 2014-15 to Rs49,95,000 in AY 2017-18 (growth of 55 per cent).
There is also an increase of 26 per cent in the average tax paid by individual taxpayers from Rs46,377 in AY 2014-15 to Rs58,576 in AY 2017-18.
During the three-year period, the number of salaried taxpayers increased from 17 million for AY 2014-15 to 2.33 crore for AY 2017-18 (up 37 per cent). The average income declared by the salaried taxpayers has gone up by 19 per cent from Rs5,76,000 to Rs6,84,000.
During the same period, there has also been a growth of 19 per cent in the number of non-salaried individual taxpayers from 19.5 million to 23.3 million and the average non-salary income declared has increased by 27 per cent from Rs4,11,000 in AY 2014-15 to Rs5,23,000 in AY 2017-18.