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Personal income tax (I-T) collection rose 20.2 per cent and corporation tax 19.5 per cent in the first seven months of the current financial year (2018-19 or FY19), over the corresponding period of the previous year (2017-18 or FY18), said Finance Minister (FM) Arun Jaitley on Thursday.

For this, he credited the government decision to demonetise high-value currency notes on November 8, 2016.

In the Budget for FY19, the government targeted 19.88 per cent growth for personal I-T and 10.15 per cent growth for corporation tax.

Quoting a plethora of statistics, Jaitley said on his Facebook page in the two years before demonetisation — 2014-15 (FY15) and 2015-16 (FY16) — direct tax collections increased 6.6 per cent and 9 per cent, respectively. Since demonetisation, the increase has been 14.6 per cent in 2016-17 and 18 per cent in 2017-18.

He also said the formalisation of the economy because of demonetisation and the goods and services tax (GST), rolled out in July 2017, had yielded growth in indirect tax collection as well.

“In FY15, the indirect tax-to-gross domestic product (GDP) ratio was 4.4 per cent. Post-GST (sic), it has climbed up by at least 1 percentage point to 5.4 per cent,” he said in his post, “Impact of Demonetisation”.

He said despite an annual I-T relief of Rs 970 billion to the smaller taxpayers and a Rs 800-billion to the GST assessees, tax collections have gone up.

The finance minister also said the GST had made it increasingly difficult to evade taxes. The indirect tax-to-GDP ratio had gone up to 5.4 per cent since the GST roll-out, from 4.4 per cent in FY15.

Source : Business-Standard

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