Car purchases spill income' beans
Indians buy 25 lakh cars a year though 24 lakh report Rs 10 lakh income.
New Delhi: India is under taxed as there are just 24.4 lakh tax payers who declared an annual income of over Rs 10 lakh, yet 25 lakh new cars, including 35,000 luxury cars, are being bought every year for last five years said a senior Central government official.
He said that a huge number of individuals are outside the tax net and with a move towards a more cashless economy the number of people paying tax could increase.
Last week the I-T department had said that through data mining it has identified 67.54 lakh potential non-filers of income-tax who carried out high value transactions in the financial year 2014-15. As people deposit their old currency after demonetisation, more people will come under income-tax department’s radar, said the senior government official.
India’s tax revenue as a percentage of its GDP was 16.7 per cent in 2016, compared with 25.4 per cent in the United States and 30.3 per cent in Japan.
The numbers point to a significant number of people who are liable to pay taxes aren’t doing so, said the official. He said further that while India has a population of over 125 crore only 3.65 crore individuals filed their tax returns in the assessment year 2014-15.
“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 Rs 5 lakh and accounted for 57 per cent of the total tax kitty. This essentially means that only 1.5 per cent of those filing tax returns (3.65 crore) are contributing to 57 per cent of tax kitty,” the official said.
However, when it is compared to car sales it clearly shows that people are escaping the tax net. “Car sales on an average in the last five years has been about 25 lakh per year. In the last three years the car sales were 25.03 lakh, 26 lakh and 27 lakh,” the official said.
The income-tax data collated shows only 48,417 persons reporting income of more than Rs 1 crore in a year. Yet luxury brands like BMW, Jaguar, Audi, Mercedes, Porsche and Maserati sell almost 35,000 cars every year. The government said that 24.4 lakh filers declared their annual income of being more than Rs 10 lakh and there were 1.47 lakh tax filers who had an income of over Rs 50 lakhs in a year.