Cheering numbers: GST imparts a big push to Income Tax base

Cheering numbers: GST imparts a big push to Income Tax base

A spectacular 53% increase in the number of income-tax returns filed electronically till July 31 has given the government renewed hope of continued high-paced growth in compliance and taxpayer base, even 21 months after demonetisation. Cheering numbers: GST imparts a big push to Income Tax baseThe goods and services tax (GST), launched in July 2017, seems to have contributed to the government’s project to expand the I-T base to a much higher degree than the note ban itself. According to official data, e-returns of 3.43 crore were filed between April 1 and July 31, 2018, compared with 2.24 crore in the year-ago period. Last year saw one of the sharpest increases (28%) in total I-T returns — electronic and otherwise — to 6.74 crore (returns mostly pertaining to 2016-17, the demonetisation year) although the growth in e-returns by the initial deadline of July 31 was a just 18%.

The effective assessees rose an unprecedented 27.5% to 8 crore in 2016-17 and direct tax buoyancy rose sharply from 0.6 in 2015-16 to 1.3 in 2016-17 and 1.9 in 2017-18. While all these bear out the how the note ban helped expand the tax base, the latest spurt in e-returns indicate the trend is not only being sustained but accelerated. In the last week of July, the government extended the deadline for filing I-T returns by a month to August 31 after a section of taxpayers and tax practitioners sought more time to comprehend the changes made in return forms. Economic Survey 2017-18 had noted that the total number of “new taxpayers” in the 13 months since demonetisation (November 2016-November 2017) were 10.1 million compared with an average of 6.2 million in the preceding six years.

It estimated additional taxpayers of about 1.8 million due to demonetisation-cum-GST, roughly 3% of the taxpayer base that existed before. The I-T department in its central action plan for the current fiscal has set a target of adding 1.25 “new taxpayers” (those haven’t paid/filed taxes earlier). While the effective assesseee base (filers and TDS cases) expanded by a whopping 1.7 crore in 2016-17, the surge in e-returns has brightened the chances of a similar or higher rise in the base for 2017-18.

The 2018-19 budget estimate for growth in direct tax collections is 14% over the previous year when the collections were Rs 10.05 lakh crore. In the April-June quarter, a sum of Rs 1.52 lakh crore was collected, a growth of just 7.7% over the year-ago period.

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Source :  Financial Express

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