Everyday false , misleading and misinformation are posted on various WhatsApp groups to create confusion and chaos in the society. Campaign of rumour and misinformations are being undertaken by many vested interests. I appeal to all to be alert and not be misguided by such false informations.
I have been receiving false messages related to statistics on Income tax payers since long . Though I do not forward to them in other groups and I try to convince forwarder of such messages to refrain from spreading wrong news. Still I feel it is better to submit below certain statistics on Income Tax payers to allay all doubts and confusion.
I request also to government and concerned officials to take required steps to stop dangerous culture of spreading misinformation on social sites . It is important to say that rumours and misinformation has greater power to kill humanity than the most powerful nuclear bomb. It is the duty of GOI to stop negativity in mass media launched by certain disgruntled people, some groups, some NGOs , some political parties or certain anti-national elements directly or under sponsorship by foreign based elements.
I submit below certain statistics on tax payers which has been collected from reliable sources and which are helpful in understanding the level of tax compliance as also tax avoidance taking place in the country. Though each government claims to have taken enough steps to ensure honest tax payment culture during last seven decades, the reality is that tax avoidance has increased year after year.
Out of 125 crore Indians , only 1.5% of them pay Income tax , that is about 1.9 crore Indians pay Income tax.
It means to say that even 98 out of 100 person do not pay tax.
93.3% of tax payers declare income less than Rs.10 lakh. 6.6 % of them declare income between Rs.10 lakh to Rs.1 crore.
And only 0.1% of them declare income more than Rs.1.00 crore.
Number of tax payers have come down whereas amount of tax paid ( tax revenue ) has gone up. In assessment year AY 2002-03 number of tax payers were 2.7 crore .After twelve years i.e. in AY 2014-15 number of taxpayers came down to only 1.9 crore.
During the same period tax revenue has increased form Rs.36858 crore to Rs.258326 crore . It means during a period of 12 years number of taxpayers declined by 30% whereas tax revenue increased by 600%.
Why number of tax payers are so less in India and why people pay so much less amount of income tax is a question which every government has to answer.
Many non-salaried income earner like consultants and professionals such as doctors and lawyers pay a power rate of income tax though they earn much higher income than the amount they declare for payment of Income tax.
Secondly there are various categories of income earners like farmers who do not pay income tax even if their income is more than Rs.2.5 lakh in a year.
Thirdly many Indians who earn income more than Rs.2.5 lac but do not declare this much income and hence either they file a Zero tax return or do not file any tax return at all.
This is why 98.5% of Indian do not pay tax .
10.1% of taxpayers in India pay tax to the extent of 77% of total tax revenue whereas 89.9% of tax payers pay only 23% of total tax revenue.
India has just 24.4 lakh tax payers who declared an annual income of over ₹10 lakh
Yet 25 lakh new cars, including 35,000 luxury cars, are being bought every year for last five years. Everyday thousands of flats valued more than one crore are sold , hundreds of commercial plots and shops are sold at more than one crore of rupees and thousands of persons go on foreign tour or costly domestic tours.
A nation of over 125 crore people had only 3.65 crore individuals filing their tax returns in the assessment year 2014-15.
Out of which only 1.9 crore people paid tax and rest filed zero tax return.. It means huge number of individuals are outside the tax net.
Of the 3.65 crore individuals (filing returns in assessment year 2014-15), there were only 5.5 lakh people who paid income tax of more than ₹5 lakh and accounted for 57 per cent of the total tax kitty.
Only 1.5 per cent of those filing tax returns (3.65 crore) are contributing to 57 per cent of tax kitty.
Those who earn Rs.21,000 and more (per month) have to pay taxes, but many small businesses, professionals (such as doctors and lawyers) and rich farmers do not pay taxes.
Tax evasion is not limited to smaller tax payers. The number of people who declare annual income of over Rs.1 crore is abysmally low at just around 50,000 in the country.
The number of income tax payers in India is extremely small keeping in view the growth in income taken place and the prosperity the country has achieved post reforms.
Growth and prosperity of the country which we witness in rising numbers on high rise buildings, increasing number of flats costing more than Rs.1 crore , increasing number of Malls , increasing number of commercial shops selling world reputed branded costly items etc do not reflect in number of taxpayers shown in the Statistics pertaining to income tax payers in India.
We have therefore to prepare a team of devoted officers , devise such policies and construct such leakproof systems by which we can be able to bring tax avoiding population within the tax net without giving much discomfort to honest taxpayers..
We , all Indian citizen want all facilities of world class standard but we do not like to pay tax even though we may afford to pay tax. We blame others , we blame governments , we blame officials , we blame politicians and we blame many others but we do not introspect to know whether we are doing our duty well . IF we are most learned and true patriot , it is our duty to teach and motivate others also who have deviated from true path.
To blame others for our discomfort and to point out faults of others is very easy but to remain correct at self level is difficult and to make other correct is more difficult task and to give and always think about comfort to others is the most difficult task.
Unless and until Government makes efforts to bring down tax avoidance , they cannot increase tax revenue and in want of financial resources, they cannot do adequate social welfare measure and neither can they develop desired world class infrastructure facilities for the comfort of India citizen.
There are huge leakages in the system . It is none other than Income tax officials who in nexus with brokers, consultants, auditors and Chartered accountants inculcate, irrigate and promote the culture of tax evasion and tax avoidance.
It is politicians who recommend various types of concessions to please their close friends and relative in business and cause loss of tax revenue. Obviously those who can afford payment of tax are avoiding payment of tax with the help of clever and greedy CAs and tax workers.
Individuals who are in government service or who are employed in organised sector cannot avoid payment of tax because there employer are duty bound to deduct tax at source at deposit the same in Government account as per schedule fixed by IT department.
But there are lacs and crores of such business men and professionals who though earn more than Rs.10 lac per year do not pay a single pie of income tax and they are fully outside of tax net. Because they pay certain amount of fee to CAs and brokers to get rid of tax payment.
For example more than 90% of doctors, Chartered Accountants , professors , teachers, pathologists and builders in India earn more than Rs.10 lake per year but hardly 1 % of them pay tax for amount more than Rs.10 lakh. Similarly there are lakhs of farmers in India who earn more than 1 crore per year but they do not pay tax at all.
Government of India will therefore peep into ground reality and make all possible efforts to recover tax from those professionals and business men who enjoy maximum facilities free and at cheap rate from Government but pay minimum tax .
On the other hand government should stop taxing salaried class people who are already bearing the brunt of taxation to unbearable extent , particularly those salaried class person whose salary is less than Rs.10 lakhs per year. It is the duty of Government to exempt salaried class from income tax for those whose annual income is less than Rs.10.00 lakh. Similarly GOI should exempt pensions from payment of income tax.
Government should assess the assets of at least Super rich persons who are avoiding payment of tax on some plea or the other or whose total income is unaccounted. They should start this process from politicians who have huge property but who evade payment of tax.
There are business men who create and construct several firms and companies to avoid payment of tax, There are doctors whose daily earning is more than one lakh rupees but whose declared income is hardly ten aka per year. There are many lawyers , CAs and other professional who earn a lot but do not pay tax truely. Builders earn crore and crores of rupees in selling of residential flats and commercial properties but manage to avoid tax using several tools .
It is worthwhile to mention here that Super rich person may be considered those persons whose monthly income is more than Rs.10 lakh but who do not pay tax. GOI can identify several lakh persons in this category. All this can happen only when tax officials are dry honest and politicians do not interfere in administration and they take initiative to promote honesty .
In Brief
Get rid of misinformation , Ensure Tax compliance from those who are in culture of tax avoidance and give respect and value to honest tax payers
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