When it comes to tax matters, Indians are the tax evaders. The country with population more than 125 Cr. is struggling with the tax collections. Recently, Income Tax Department of India issued statistics of Income Tax Collection AY 2015-16. It was found that a total of 4.06 Crore (Approx 3%) Indians filed Tax returns and interesting fact is only 2 Crore Indians paid taxes. It simply shows that 50% of Tax returns are filed as Nil returns.
As per Income Tax Department, most of the small businesses filed returns without proper books of accounts. It is not a good sign. Despite of this, Revenue officers think that GST may boost Income Tax collection. Government has already considered this and Prime Minister ordered Tax committee to create new simplified Direct Tax code.
On an average, it is found that people are reluctant about tax matters and Performance of IT dept is under scrutiny. It is being said that upcoming 2-3 years may change this scenario forever.
Here are some of the shocking facts
- Only 5 Indians reported income more than ₹100 Cr.
- 69 Indians reported Income between ₹25 Cr to ₹100 Cr.
- 97% Indians have not filed income tax returns.
- Out of remaining 3% Indians only 1.5% Indians paid taxes.
- Income tax collection reduced as compared to AY 2014-15.
- Salaried employees are found to be more sincere in Tax matters.
Keeping eye on these facts government has stepped up to introduce new Direct Tax Code. Current Income Tax is cumbersome statute and is 50 years old with too many temporary amendments and that’s why Prime Minister Modi ordered Finance Ministry to set up a Special Task force to draft a new Direct Tax code.
The new tax law will be drafted keeping in mind the infrastructural developments in other countries.
4 Years ago UPA Government tried to introduce Direct Tax Code, 2013 but it was lapsed with the dissolution of the Lok Sabha. The new bill is expected to be introduced only after the end of 2018.