Direct Tax collections share in economy falls to decade low of 5.47% in FY16

Corporate tax collections have risen nearly 12-fold in last 15 years and personal income tax has increased 9 fold but a share of direct taxes in the economy has fallen to almost a decade low of 5.47%, according to direct tax data published by the government on Friday.

There was not much differential between corporate tax collections and personal income tax collections in 2000-01.

While corporate tax collections that year stood at Rs 35,696 crore, personal income tax collections were Rs 31,764 crore.

In 15 years, corporate tax collections have risen 12-fold to Rs 4,54,419 crore in 2015-16 and is more than 58% higher than Rs 2,86,801 crore income tax collections.

After including other direct taxes, total direct tax collections were Rs 68,305 crore in 2000-01 which has risen to Rs 7,42,295 crore in 2015-16.

Prime Minister Narendra Modi took to the twitter to say it was a "landmark" decision to publish income tax data. "It is a big step towards transparency & informed policy making." "Am sure this data will be used by researchers and analysts and lead to enhanced insights for policy making on taxation," he said.

The data showed 2.9 crore Indians filed income tax returns and the largest group of taxpayers earned an average of Rs 6,94,000 while just six people declared an average income of Rs 68.72 crore in 2012-13 as per the latest data.

The share of direct taxes to gross domestic product (GDP) touched a peak of 6.3% in 2007-08 and has since declined to 5.47% in 2015-16. It was 3.25% in 2000-01.

Maharashtra contributes the biggest share of direct taxes at Rs 2.77 lakh crore in 2014-15 when total collections were Rs 6.96 lakh crore.

Delhi was the second biggest contributor at Rs 91,247.90 crore while Karnataka was third at Rs 60,595.22 crore. Modi's home state Gujarat gave Rs 35,912.46 crore of taxes, behind Tamil Nadu's Rs 44,732.62 crore. State-wise data for 2015-16 was not available.

Direct taxes made up for 36.31% of the total taxes in 2000-01. This ratio has risen to 51.05% in 2015-16. The ratio of direct taxes to total taxes in 2015-16 is the lowest in past nine years with a peak of 60.78% being hit in 2009-10. The ratio was 52.97% in 2007-08 and over 56% in 2013-14 and 2014-15.

Indirect tax collections have risen from Rs 1.2 lakh crore in 2000-01 to Rs 7.12 lakh crore in 2015-16. Total tax collection in 2015-16 was Rs 14.54 lakh crore as against Rs 1.88 lakh crore in 2000-01.

The cost of tax collection has however gone down from 1.36% to 0.62%. In absolute terms, the spending on a collection of taxes has however risen from Rs 929 crore to Rs 4,593 crore during the period.